El Salvador, the first government to legalize bitcoin, purchased 410 bitcoin for $15 million on Friday, when the currency was trading at its lowest point in six months, President Nayib Bukele said on Twitter.
El Salvador became the first country to recognise bitcoin as legal tender in September, installing bitcoin ATMs and obliging companies to accept the cryptocurrency. Bukele later promised to develop a tax-free Bitcoin City on the Salvadoran coast, to expedite citizenship for specific blockchain investors, and to set up geothermal bitcoin mining facilities, which may turn the Central American country into a global crypto mining hotspot. El Salvador’s other official currency is the US dollar.
If the use of bitcoin as a currency improves El Salvador’s economy, “it’s game over for FIAT,” tweeted Bukele, who describes himself as “CEO of El Salvador” in his Twitter description.
However it made Bukele a hero in the crypto community, El Salvador’s adoption of bitcoin as legal cash sparked huge protests from Salvadorans who felt that the decision made life more difficult for ordinary people while benefiting large investors. According to Al Jazeera, in September, anti-bitcoin demonstrators raised placards and torched tyres in front of the Supreme Court building in San Salvador until they were removed by heavily armed police. Meanwhile, El Salvador’s national debt has risen to more than 50% of its GDP. Moody’s cut the country’s credit rating to Caa1, indicating very high credit risk, in July. According to Moody’s, El Salvador’s bitcoin exchanges increase the country’s credit risk. El Salvador is attempting to obtain a $1.3 billion loan from the International Monetary Fund, which has previously warned against it.