El Salvador now has over 200 Bitcoin ATMs installed, which should help boost its attempt to make bitcoin a greater part of the economy.
Data from Coin ATM Radar shows that El Salvador has the third-highest number of bitcoin ATMs across the world, behind the United States and Canada. In total, El Salvador’s bitcoin ATMs account for 0.7% of all such machines worldwide. The U.S. and Canada lead with 86.4% and 6.6%, respectively.
El Salvador has had to beef up its infrastructure following the announcement that it would make bitcoin legal tender. The country has also purchased 400 bitcoins to facilitate the move into digital assets. Additionally, it has built and released a digital wallet called Chivo to make transactions more seamless.
But despite these changes to the system, the transition is far from smooth. There have been reports of ATMs being destroyed as citizens protest against the government for various reasons.
One of the primary issues that both opposition party members and citizens have with bitcoin is the volatility associated with the asset. For example, some in the country have drawn attention to salary payments, which could be gravely affected by it. Bukele has insisted that bitcoin use will be optional, which has somewhat appeased critics.
It does not help that these groups have several other issues with President Nayib Bukele’s government. At this point, it’s unclear how this move, the first of its kind, will affect the country both internally and externally. Other nations will keep a close eye to see the ramifications, even if they were never keen on legalizing bitcoin.
El Salvador’s bitcoin experiment highly divisive
To say that El Salvador’s decision to legalize bitcoin is controversial is a severe understatement. While market enthusiasts have cheered the move, there has been little to celebrate following the passing of the related legislation. Most recently, an El Salvadorian court began investigating the government’s purchase of bitcoins.
Condemnation arrived swift and strongly from many sides, including from international bodies regulating financial matters. The International Monetary Fund issued a statement saying that there would be macroeconomic and legal issues related to the move. The World Bank has outright said that it would deny assistance to the country, adding to its woes.
But that has not stopped the government from resolutely following through with its plans, and Bukele hopes to attract entrepreneurs and investors. He has declared that foreigners would be exempt from capital gains tax on their bitcoin profits, besides granting permanent residency.
It has only been a few months since the law was passed and even fewer since the infrastructure like the Chivo wallet appeared. Any long-term effects of making bitcoin legal tender will only be apparent over the next year or two.
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