The citizens of El Salvador have another incentive to use Bitcoin. On the eve of the country’s President Nayib Bukele said that now for paying for gasoline in BTC using the national Chivo cryptocurrency wallet, a discount of 20 cents per gallon will be provided .
At the same time, Bitcoin itself has become an official means of payment in El Salvador and is now actively used by citizens.
Recall that Bitcoin was recognized as an official means of payment in the country on September 7, that is, less than a month ago. Accordingly, now the cryptocurrency is essentially equated to the US dollar, which was the only national currency of El Salvador before that. And this speaks of its serious potential on a global scale.
And while the idea of mass adoption of cryptocurrencies seems great, not everyone is thrilled with what is happening. In particular, the representative of the BlockBank project Nolvia Serrano is concerned that the holders of the private keys from the state crypto wallet are still unknown – as well as the details of the relationship with the national wallet provider Chivo.
How Bitcoin is used
Bukele himself believes that such a step will help citizens save more on everyday needs. Here is a translation of his quote from a recent Twitter statement, in which the president shares his vision of the situation. The replica is given by Cointelegraph.
State-owned company Chivo has held talks with the largest fuel suppliers in the country. Starting tomorrow, gas stations will sell every gallon 20 cents less when using a crypto wallet.
Accordingly, this is a serious reason to contact cryptocurrencies for those who have not yet had time to do so. At the same time, there are enough bitcoin owners and active cryptocurrency users in the country. As President Bukele tweeted the day before, more than three million citizens are already interacting with the national crypto wallet Chivo. At the same time, as of 2020, the total number of residents of the country is 6.48 million.
The President noted that the discount will have no limits, while both individuals and legal entities can use it. Such a strategy would allegedly «lower the cost of fuel on a global scale» and reduce the cost of transporting it. True, some Salvadorans found a catch in the news. For example, here’s a comment from Twitter user Adan 3840.
These 20 cents will be taken from us, right? Gas stations will not lose money, they will simply take funds from taxes.
🤔🤔Esos 20 centavos, saldrán de todos nosotros cierto? La Gasolinera no pierde, ahí va el reintegro después pagado con impuestos de incluso los que andamos a pie
– Swap (@ Adan_3840) September 30, 2021
This assumption is logical. Still, even if enterprises sell goods at a discount, the government will most likely refund the price difference later. And usually such payments are made just from the local budget. So, in essence, it will be taxpayers’ money.
Others reacted negatively to the government’s decision to offer the rebate only to those paying with Chivo. At the same time, some asked why the presidential administration has not yet succeeded in lowering fuel prices.
According to sources, Bukele also set up a fund designed to “stabilize” domestic prices for liquefied gas. The president said that while the international market plans to raise the price of 25-pound LPG cylinders by $ 1.17, the local residents of El Salvador will experience a «slight decrease» in the cost.
We believe this initiative is more like a desire to gain citizen recognition and a friendlier electorate in the future. Still, companies are unlikely to be forced to work at a loss, therefore, compensation for the difference in the cost of gasoline will most likely be paid – and from the country’s budget. Be that as it may, Nayib Bukele achieves its goals. There are more and more cryptocurrency users in the country, and this can be an excellent example for other states. In addition, the country buys bitcoins for its own reserves. According to the president, now El Salvador has 700 BTC, and they have already moved into a state of profit.