El Salvador’s Legislative Assembly has passed legislation creating a $150 million Bitcoin Trust and supporting the development of crypto infrastructure and services across the Latin American country. The bill passed on Aug. 31, with 64 officials voting in favor and 14 opposing the Trust’s creation. The Trust is designed to facilitate the conversion of Bitcoin into U.S. Dollars and support the rollout of vital technological infrastructure enabling widespread adoption of crypto assets.
The Development Bank of El Salvador will oversee the Trust’s operation.
The news comes just before the controversial Bitcoin Law is set to take effect. The impending legislation will recognize BTC as legal tender across El Salvador and is slated to take effect on Sept. 7. Currently, U.S. dollars are used as legal tender in the country. The Development Bank of El Salvador (Bandesal) has been appointed to oversee the Trust’s operation. The $150 million will be redirected from the country’s $500 million loans with the Central American Bank for Economic Integration (CABEI). The CABEI loan was originally taken for the purpose of economic recovery for small and medium-sized businesses.
$23.3 million will be used to support the installation of government-backed crypto ATMs.
Out of the $150 million Fund Trust, $23.3 million is earmarked to support the installation of government-backed crypto ATMs — allowing local citizens to exchange between Bitcoin and USD. $30 million has also been designated to offer incentives to encourage the adoption of the Government’s digital wallet, Chivo. Earlier, El Salvador’s President Nayib Bukele announced the Government would airdrop $30 worth of Bitcoin to every Salvadoran adult who downloads the Chivo wallet. However, the country’s current population is 6.5 million, suggesting the Government either believes adoption will be lower or has not allocated enough Bitcoin to go around.