El Salvador’s Legislative Assembly has passed legislation that establishes a $150 million Bitcoin Trust, this move aims to encourage the development of crypto infrastructure and services throughout the country.
On Aug. 31, the bill passed with 64 officials voting in favour and 14 votings against the creation of the trust. The Trust’s goal is to make it easier to convert Bitcoin into US dollars and to fund the development of critical technology infrastructure that will enable mainstream acceptance of crypto assets.
The announcement comes only one week before the country’s contentious Bitcoin Law takes effect. The proposed legislation, which is set to take effect on September 7th, will recognize BTC as legal cash throughout El Salvador. The United States dollar is currently the country’s legal tender.
The El Salvador Development Bank (Bandesal) has been tasked with overseeing the trust’s operations.
The $150 million will come from the Central American Bank for Economic Integration’s $500 million loan to the country (CABEI). The CABEI loan was originally taken out to help small and medium-sized businesses recover their economic footing.
$23.3 million of those funds will be used to assist the installation of government-backed crypto ATMs, which will allow local residents to trade Bitcoin for US dollars.
In addition, $30 million has been set aside to provide incentives to encourage the use of the government’s digital wallet, Chivo.
President Nayib Bukele declared in June that every Salvadoran adult who downloaded the Chivo wallet would receive $30 in Bitcoin.
El Salvador, on the other hand, has a population of 6.5 million people, implying that the government either feels adoption would be lower or that there will not be enough Bitcoin to go around.
In related news, asset tokenization and financial infrastructure firm Koibanx said today that it has inked an agreement with the government of El Salvador to construct the country’s digital currency infrastructure, which will be built on Algorand’s open source blockchain.
El Salvador’s Bitcoin Law has drawn harsh criticism and suspicion from international organizations as well as its own citizens.
Mara Luisa Hayém Brevé, Minister of Economy, stated that the government was focusing on cryptocurrency education and using crypto incentives to alleviate the high level of uncertainty among the populace.
