El Salvador, on Tuesday, will become the first country in the world to accept bitcoin as legal tender, despite widespread domestic skepticism and international warnings of risks for consumers.
President Nayib Bukele’s government claims the move will give many Salvadorans access to bank services for the first time and save some $400 million in fees on remittances sent home from abroad every year.
“Tomorrow, for the first time in history, all the eyes of the world will be on El Salvador. #Bitcoin did this,” Bukele said on Twitter Monday.
He started the ball rolling Monday evening by announcing El Salvador had bought its first 400 bitcoins, in two tranches of 200, and promised more were coming.
The 400 bitcoins were trading at around $21 million, according to the cryptocurrency exchange app Gemini.
Recent opinion polls showed a majority of El Salvador’s 6.5 million people reject the idea and will continue using the US dollar, the country’s legal currency for the last 20 years.
“This bitcoin is a currency that does not exist, a currency that will not benefit the poor but the rich,” said skeptic Jose Santos Melara, who took part in a protest by several hundred people in the capital San Salvador last week.
“How will a poor person invest (in bitcoin) if they barely have enough to eat?”
In June, El Salvador’s parliament approved a law to allow the crypto money to be accepted as tender for all goods and services in the small Central American nation, along with the US dollar.
The bill, an initiative of Bukele, was approved within 24 hours of being presented to Congress — where the president’s allies have held a majority since March.
Experts and regulators have highlighted concerns about the cryptocurrency’s notorious volatility and the lack of any protections for its users.
The government is installing more than 200 bitcoin teller machines, some guarded by soldiers to prevent possible arson by opponents.
And Bukele has promised $30 for each citizen who adopts the currency.
“These are decisions the administration and lawmakers have taken without consulting” the population, said Laura Andrade, director of the Public Opinion Institute of the Central American University, which found in a poll that 70 percent of Salvadorans opposed the move.