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President Nayib Bukele in the Legislative Assembly building in San Salvador, El Salvador, in June. Photo: Camilo Freedman/Bloomberg via Getty Images

El Salvador bought its first 400 bitcoins on Monday, and President Nayib Bukele pledged to buy "a lot more" ahead of adopting the cryptocurrency as legal tender.

Why it matters: El Salvador will become on Tuesday the first country to formally adopt bitcoin — marking the "biggest test" the digital currency has faced in its 12-year history, per Bloomberg.

A tweet previously embedded here has been deleted or was tweeted from an account that has been suspended or deleted.

By the numbers: 200 bitcoins had a market value of about $10 million as of Monday night, bitcoin.com notes.

The big picture: El Salvador's legislature voted in June to make bitcoin legal tender.

  • The digital currency will be used alongside the U.S. dollar, the nation's official currency.

Of note: The World Bank in June rejected the government of El Salvador's request to help the government implement bitcoin, citing environmental and transparency concerns.

How it works: The government will provide a bitcoin wallet, called Chivo, which will be pre-loaded with $30 in digital currency for users who've registered with a Salvadoran national ID number. 

  • "Businesses will be required to accept the digital coin in exchange for goods and services and the government will accept it for tax payments," Bloomberg notes.

What to watch: "Crypto is sexy but untested and complicated especially for a country like El Salvador,” Stifel Nicolaus & Co. managing director Nathalie Marshik told Bloomberg.

  • "It’s extremely risky, and there is the question of, is the Bandesal fund big enough? The regulations look like the law, put together really quickly. It’s a big question mark."

Go deeper: El Salvador moves into bitcoin

Go deeper

El Salvador’s bitcoin experiment begins

Street vendors in San Salvador have put stickers in their carts that say “No to Bitcoin”. Photo: Marvin Rencinos/AFP via Getty Images

El Salvador’s law making bitcoin legal tender goes into effect today, despite skepticism that the decentralized digital coin can actually work as a country’s currency.

Why it matters: The Central American nation is the first to establish bitcoin as a formal currency.

Felix Salmon, author of Capital
Sep 8, 2021 - Economy & Business

El Salvador's bitcoin experiment has rocky start after sell-off

Data: FactSet; Chart: Axios Visuals

It was a rocky start: Bitcoin suffered a disorderly sell-off on Tuesday, alongside most other cryptocurrencies, to mark the day on which it officially became legal tender in El Salvador, along with the more widely accepted U.S. dollar.

Why it matters: While a 17% daily swing is far from unprecedented for bitcoin, it's not the kind of thing most citizens want from their currencies. Neither is having a payments mechanism that can be unplugged by the government at will.

Facebook admits "trust deficit" as it looks to launch digital wallet

Photo illustration: Axios Visuals. Photo: Andrew Harrer/Bloomberg via Getty Images

Facebook says it's finally ready to launch its most ambitious new product in years: a digital wallet called Novi. But the man leading the charge says Washington could stand in its way.

Why it matters: Facebook needs to convince regulators skeptical of its power that it's a good idea. "If there's one thing we need, it's the benefit of the doubt," Facebook's David Marcus said in an interview with Axios. "[W]e're starting with a trust deficit that we need to compensate."