El Salvador’s adoption of Bitcoin as a legal tender officially kicked off Tuesday, and the country announced the purchase of $21 million worth of the cryptocurrency ahead of the rollout.
President Nayib Bukele announced the purchase of 400 bitcoin — worth around $20.9 million — in a series of tweets late Monday, marking the country’s first step toward a broader rollout planned months ago.
“Our brokers will be buying a lot more as the deadline approaches,” he added, along with “#BitcoinDay.”
The small and impoverished Central American nation’s legislative body approved the so-called Bitcoin Law, which makes the digital currency the nation’s official legal tender, along with the US Dollar, in early June.
Bukele, who has passionately touted Bitcoin on social media and in public speeches, quickly signed the bill into law, establishing the Sept. 7 roll-out date and making El Salvador the first country in the world to adopt Bitcoin as legal currency.
The country’s purchase of Bitcoin on Monday also makes it the first to have officially put Bitcoin on its balance sheet and hold it in its reserves.
The rollout of Bitcoin as the nation’s legal tender will allow residents to pay for goods and services — or even taxes and home loans — with Bitcoin.
The government said in the law that the adoption of Bitcoin will hopefully boost financial inclusion among the 70 percent of citizens who don’t have a bank account or access to traditional financial services.
Bukele has also noted that the adoption of Bitcoin could allow migrants living abroad to send money home to El Salvador while avoiding costly fees charged by traditional intermediaries.
About a quarter of El Salvador’s citizens live in the US and last year, they sent home more than $6 billion in remittances, Bukele has previously said.
To assist with the rollout and encourage rapid adoption, the government will spend more than $225 million in a plan that includes the launch of an e-wallet app called Chivo, slang for “cool,” which can be used for purchases in Bitcoin or US dollars.
Users will get $30 in Bitcoin when they sign up in an effort to encourage adoption.
But on Tuesday morning, when the app was supposed to launch, it wasn’t immediately available on major app stores like Apple’s and Google’s.
The government will also pay to launch 200 Bitcoin ATMs and build a chain of Chivo-brand kiosks with staff who will talk with citizens around the country about the benefits and risks of Bitcoin.
The price of Bitcoin was trading about 1 percent lower at 7 a.m. ET compared with 24 hours earlier. The crypto is changing hands at more than $51,100 per coin, which is up more than 50 percent from July, when it fell briefly below $30,000 per coin.
The crypto is still about 24 percent below its peak, which was seen in April when it nearly hit $65,000 per coin.