Bitcoin and El Salvador saw one of the most important moments in their history take place last week when the country passed a law making Bitcoin legal tender. Starting with a new BTC wallet to how the groundwork was laid to make BTC legal tender in El Salvador, let’s look at some of the biggest developments over the past week.
BTC Now Legal Tender In El Salvador
El Salvador has made history by becoming the first government to adopt Bitcoin, with help from Bitgo that is behind the technology that is powering the entire effort. The South American country had outlined its intentions about adopting BTC in June, with president Nayib Bukele announcing the decision on his official Twitter handle. The bill for the Bitcoin law was passed after 62 out of a total of 84 Congressmen voted in favor. El Salvador will also be looking at sustainable bitcoin mining, exploring renewable energy use for Bitcoin mining.
BitGo To Provide El Salvador With Crypto Wallets
After adopting BTC as legal tender, El Salvador will be using the official Chivo digital wallet, which will be provided by Bitgo, a crypto custody firm based out of California. Bitgo will provide the Chivo security platform and the application programming interface. Since its founding in 2013, Bitgo has become one of the most valuable blockchain companies, offering multisig wallets and custody services for Bitcoin.
Mike Belshe, CEO and Co-Founder of BitGo, commented on El Salvador’s decision, stating,
“Digital assets look so different from what we’ve seen with other types of money, and so people wonder about how [they] fit in, but this is an opportunity to build financial freedom for the people of El Salvador.”
Chivo Wallet Could Cost MoneyGram, Western Union Around $400 Million.
Several reports have stated that the Chivo Wallet could cost money service providers such as MoneyGram and Western Union to lose around $400 Million in commission made due to remittances. With remittances making up over 23% of El Salvador’s GDP, money service providers such as MoneyGram and Western Union were the preferred method of transferring the remittances. However, the Chivo wallet could change all that.
Snowden Shares His Thoughts On El Salvador’s Bitcoin Law
Whistleblower and privacy activist Edward Snowden weighed in with his thoughts on the possible implications of the Bitcoin law. According to Snowden, the implementation of Bitcoin as legal tender could put pressure on competing nations to follow suit, with other countries being forced to acquire Bitcoin. He further stated that Bitcoin’s technical design incentivizes early adoption.
El Salvador Faces Media Onslaught
After the announcement that El Salvador will be adopting Bitcoin as legal tender, the world media has unleashed a barrage on the South American country, drawing the ire of the IMF. Several media reports have come out against the adoption of BTC. According to economist Steve Hanke, the existing system is working perfectly fine. He also backed MoneyGram and Western Union, commenting that they are cheaper and better methods to send remittances.