El Salvador's President Nayib Bukele said that using Bitcoin will be optional when it becomes legal tender on September 7.
SAN SALVADOR - President Nayib Bukele of El Salvador announced in a national speech on Thursday that a newly passed law making bitcoin legal tender will take effect on Sept. 7, but that its use will be optional.
El Salvador's Congress has already accepted Bukele's proposal to accept bitcoin as legal tender, making El Salvador the first government in the world to do so.
"Bitcoin usage will be optional; no one will obtain bitcoin if they do not want it... If someone receives a bitcoin payment, they can choose to have it instantly converted to dollars "Bukele stated.
Salaries and pensions will continue to be paid in US dollars, according to Bukele, who did not explain whether this included governmental and private sector personnel.
Athena Bitcoin announced earlier in the day that it plans to invest over $1 million in El Salvador to build 1,500 bitcoin ATMs, particularly in areas where inhabitants receive remittances from abroad.
The ATMs can be used to buy bitcoins or sell them for cash, according to the Athena Bitcoin website.
"One of the reasons we passed the bitcoin law is to benefit individuals who make remittances," Bukele said, adding that utilising the cryptocurrency would avoid the hefty costs of commissions currently involved with sending money home.
El Salvador is significantly reliant on money sent back from foreign labour. According to World Bank figures, remittances to the country totaled about $6 billion in 2019, accounting for nearly a fifth of the country's GDP, one of the highest percentages in the world.
Less than 1% of worldwide cross-border remittances are presently made in bitcoin, according to Kenneth Suchoski, united states payments and fintech analyst at Autonomous Research. However, cryptocurrency is likely to make for a larger share of the more than $500 billion in yearly global remittances in the future.