El Salvador offers its citizens free Bitcoin

Bukele doubles down on crypto commitment with a giveaway

El Salvador has doubled down on its plans to support Bitcoin by offering $30 of the digital asset to any adult citizen downloading and registering with the country’s official cryptocurrency app. At the time of writing, $30 was is 0.00093 bitcoin. 

The country announced plans to recognize Bitcoin as legal tender earlier this month, passing a 'Bitcoin law' that officially eliminated capital gains taxes on the digital asset and enabled citizens to use it for tax payments.

President Nayib Bukele made the announcement on television late last night as part of an hour-long talk explaining the country's support of Bitcoin to citizens. It will provide the app, called Chivo, on iOS and Android

"The government is going to give this bonus for two reasons: one, to promote the use of Bitcoin in the economy, and second, so that people have an incentive to use the application and download it," Bukele said. 

"What we are trying to do with the Bitcoin law is to connect our country with the rest of the world, attract foreign exchange, investment, and tourism, and boost our economy," Bukele continued. 

He hopes to bring more money into the country via Bitcoin, using it as an economic multiplier to funnel tourist funds into the national economy. The app attempts to kickstart the process by creating a critical mass of users who can accept Bitcoin. 

Bitcoin has become more of a speculative asset these days as massive swings in value make it difficult to rely on it as a form of exchange. It fell from $35,884 last night to $31,600 this morning. 

However, the president hopes that the app's dual-currency functionality will protect users who don't want exposure to that risk. 

He explained the app's functionality at length, dwelling extensively on its ability to make and receive payments in US dollars — the standard currency in El Salvador — or Bitcoins. A person might make a payment in Bitcoins using the app, but the recipient can receive the money in dollars. 

Related Resource

How to maximise the value of your data and apps with IaaS

Free yourself from infrastructure complexity

Free yourself from infrastructure complexity - white words against a green background - whitepaper from OracleDownload now

Article seven of the Bitcoin law forces everyone to accept Bitcoins as payment, but he argued that articles eight and 12 constrain that mandate. Article eight says the state must provide instant conversion from Bitcoins to dollars. Article 12 says those without the technology to accept Bitcoins are excluded from the mandate. 

By offering that conversion, the government appears to be setting itself up as a de facto Bitcoin exchange. The big question is if its dollar conversion service protects citizens from Bitcoin’s volatility, what is the government doing to protect itself from that risk in the long term? 

There are no details yet on how the government plans to distribute the $30 in free Bitcoin. 

Featured Resources

2021 Thales access management index: Global edition

The challenges of trusted access in a cloud-first world

Free download

Transforming higher education for the digital era

The future is yours

Free download

Building a cloud-native, hybrid-multi cloud infrastructure

Get ready for hybrid-multi cloud databases, AI, and machine learning workloads

Free download

The next biggest shopping destination is the cloud

Know why retail businesses must move to the cloud

Free Download

Recommended

What is cryptocurrency mining?
cryptocurrencies

What is cryptocurrency mining?

23 Sep 2021
Liquid cryptocurrency exchange loses $97 million after hack
cryptocurrencies

Liquid cryptocurrency exchange loses $97 million after hack

20 Aug 2021
False crypto-mining apps plague Google Play
cryptocurrencies

False crypto-mining apps plague Google Play

19 Aug 2021
Ohio resident pleads guilty to running Bitcoin “mixer” money laundering scheme
cryptocurrencies

Ohio resident pleads guilty to running Bitcoin “mixer” money laundering scheme

19 Aug 2021

Most Popular

Best Linux distros 2021
operating systems

Best Linux distros 2021

11 Oct 2021
Veritas Backup Exec 21.3 review: Covers every angle
backup software

Veritas Backup Exec 21.3 review: Covers every angle

14 Oct 2021
HPE wins networking contract with Birmingham 2022 Commonwealth Games
Network & Internet

HPE wins networking contract with Birmingham 2022 Commonwealth Games

15 Oct 2021