April 13, 2024

Image for article titled El Salvador is moving $400 million worth of bitcoin around its crypto piggy bank

Photo: A sign that reads “Now you can pay with your bitcoins at McDonald’s” is seen in a McDonald’s restaurant, where the cryptocurrency is accepted as a payment method, in Antiguo Cuscatlan, El Salvador September 8, 2021. REUTERS/Jose Cabezas (Reuters)

El Salvador, where bitcoin is (controversially) accepted as legal tender, is moving some of its digital coins around. The nation has shifted $400 million worth of bitcoin to a cold wallet stored in a physical vault. In crypto, a cold wallet refers to devices that store cryptocurrency private keys offline.

President — and self-styled dictator — Nayib Bukele, who recently won re-election, wrote on X that the nation has ‘‘decided to transfer a big chunk of our bitcoin to a cold wallet, and store that cold wallet in a physical vault within our national territory.’’

‘‘You can call it our first bitcoin piggy bank,’’ he added. He included a photo of the wallet, which has 5,689.68 bitcoin, which is worth $411 million at its current price.

El Salvador has more bitcoin than ever

A collection of that size shows that El Salvador has significantly higher than previously estimated bitcoin.

With the latest post, Bukele doubled down on his position on bitcoin, as he had previously introduced the cryptocurrency for selling passports, trading goods and services, mining, and government services.

Buying McDonald’s with bitcoin

In El Salvador, bitcoin has been swapped in for plenty of everyday purchases; one can pay for their McDonald’s orders, for example, with the cryptocurrency.

In 2021, the Central American nation became the first country to accept bitcoin as a legal tender. The move was harshly criticized by the International Monetary Fund. Meanwhile, citizens took to the streets in protest.

Bukele argued he would power bitcoin mining operations in the country with geothermal energy from a volcano. As he begins his second term as president, the delivery on that promise has yet to be seen.

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