El Salvador bought 200 bitcoins on the eve of the crypto tender.
Bitcoin, the original groundbreaking cryptocurrency, first became legal tender when El Salvador carried out its high-profile and much-discussed plan.
In the crypto markets, however, Bitcoin didn’t see a surge from day one as crypto fell 1% and traded at around $ 51,208.
On the so-called “Bitcoin Day”, the crypto is now to be accepted as a tender in the South American country alongside the US dollar, which has been widely used since 2001.
It cost El Salvador around $ 400 million to use the dollar as a means of payment last year, with about $ 6 billion in dollar transfers (representing more than 20% of the country’s GDP) in 2020. Reducing costs and dependence on the dollar was central to the South American country’s craze for Bitcoin.
After the country’s Bitcoin Law was passed a month ago, Salvadorans can now use Bitcoin to pay for goods and services, and can even use the cryptocurrency to pay their taxes to the government.
Before today’s milestone, the country bought around 200 bitcoins worth $ 10.2 million and promised to buy.
The digital currency revolution in El Salvador has been hailed by the crypto evangelists who have been promoting a campaign on social media worldwide to buy $ 30 bitcoin (which reflects the $ 30 promised every Salvadoran when it was launched rather viewed as a controversial move.
Political opponents of President Nayib Bukele considered the change unconstitutional, while the World Bank highlighted macroeconomic and legal issues in June.
Moodys has downgraded El Salvador’s credit rating under the Bitcoin Act and the country’s dollar-denominated bonds have put pressure on international markets. Many market analysts have pointed to the likelihood of volatility that could negatively affect Salvadorans in the future.
In addition, the country has applied for funding of 1 billion US dollars from the International Monetary Fund (IMF).