On the night of June 25, Nayib Bukele announced a nationwide airdrop for all Salvadorans who created an account on the country’s new Bitcoin wallet. A preview of the infrastructure rollout necessary for Bitcoin to achieve legal tender status in less than three months.
A cool airdrop… but not only that!
In his address, the President of El Salvador said that the government will distribute $30 worth of Bitcoin for free to every adult citizen in the country. According to the latest census, there are 4.5 million Salvadorans over the age of 18. Therefore the government will have to buy nearly $130 million worth of Bitcoin in order to carry out its national airdrop.
According to on-chain analyst Willy Woo, this influx of users would increase Bitcoin’s user base by about 2.5 percent. The latest census data is considered inaccurate by some analysts, who estimate the country’s adult population to be nearly 6 million. The exact numbers are hard to find, but Statista shows that in 2019, the population aged 15 and over accounted for more than 4.72 million individuals. Therefore, two years later it seems that the adult population is closer to 4 million people than 6 million.
In order to benefit from this distribution of bitcoins, Salvadorans will have to install the new wallet unveiled by Bukele during his speech: Chivo. The term has multiple meanings in Latin America, but in Salvadoran slang Chivo is a meliorative adjective synonymous with “cool”.
“The app will work anywhere there is a cellular connection, and you won’t need a mobile plan to access it. ”Nayib Bukele, President of El Salvador
It should also be noted that the app will allow payments in bitcoin via the Lightning Network and Strike’s proposed solution, but recipients of those payments will be able to decide whether to receive said payments in dollars… or keep them in bitcoin. While the assumption of using USDT as the dollarized base had made headlines for a while, it has since been beaten back by Strike’s boss Jack Mallers: the company announced that it has made agreements with some of the largest banks in El Salvador to use only real dollars.
A turnaround that can be seen as positive – ridding the project of the aura of opacity associated with Tether (USDT) – but which raises other questions according to some experts, especially with regard to the control that the Salvadoran government might be tempted to exert over the convertibility of bitcoin to and from the dollar within these “national” wallets.
El Salvador’s bitcoin law was passed about two weeks ago, but the law that recognizes BTC as a legal currency throughout the country will go into effect on September 7. This initial is already being hailed around the world, however, the International Monetary Fund (IMF), as well as the president’s opposition has doubts about the appropriateness of this new legislation.