before September 7 Bitcoin Law Implementation date El Salvador President Nayib Bukele revealed a new government crypto application. The government-issued app, known as Chivo, will be used to distribute bitcoins to citizens.
According to reports, every citizen who downloads and signs up the app is automatically eligible for a $30 drop in bitcoin. The president said the move is in an effort to boost bitcoin adoption across the country.
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El Salvador has become the first country to adopt Bitcoin as a currency Legal currency When she announced she was doing so last June. The announcement was made at the Bitcoin Conference held earlier in the year in Miami. Moreover, the president stated that citizenship will be granted to individuals who invest 3 bitcoins in the country’s economy.
The plan was announced during public address by the president last night.
Why a government-issued wallet?
The simple answer to this question is logistics. The anonymity of Bitcoin makes it possible for people to create multiple wallets from other wallet providers. It would be a nightmare for the government if it tried to discern who was real or not, who actually received his airdrop and was advancing again. The wallet issued by the government will ensure that the government can confirm that the users were real citizens. It will help alleviate the potential problem of people trying to receive more than one airdrop.
It could also mean adopting a government crypto wallet. This can serve as a central database for people who use coins.
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Just because it is issued by the government does not mean that people have to leave their coins in the wallet. Once they earn $30, they can simply transfer it to any wallet of their choice. But there will at least be a record that they have already received their airdrop.
The cost of the airdrop is estimated at about $117 million. This is a calculation of the country’s population and then the population for the ages eligible for airdrop.
El Salvador has a population of 6.5 million. It is estimated that about 60% of this number are over the age of 14. This means that about 3.9 million people will be eligible for airdrops. This brings the cash estimate to $117 million. This translates to about 3,440 bitcoins.
Adoption in El Salvador
President Bukele took his time in the speech to explain why they were doing so. He mentioned that they want to encourage the use of bitcoin by citizens. And what better way to do that than to give people some free bitcoins to spend?
According to the president, “What we do is encourage the use of bitcoin and encourage the use of the system. Which will generate a multiplication of money in the economy.”
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The argument for the adoption of bitcoin by the president has long been to protect the unbanked. It is said that about 70% of the citizens of El Salvador do not have bank accounts. This means that more than half of the population does not have access to a proper bank account.
In response to the growing rumors that wages and pensions will be paid in bitcoin, President Bukele assured the nation that such a thing would not happen. Wages and pensions will continue to be paid in US dollars.
During the speech, President Bukele also conducted a preview of the Chivo app. Display graphics and ease of use.
The Chivo app has not yet been released for use. But it will be available for Android and iOS devices. It will be compatible with other cryptocurrency wallets.
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