El Salvador to Use Bitcoin Profits to Build $4 Million Pet Hospital

October 12, 2021, 10:30 AM AEST - 3 months ago

El Salvador President Nakib Bukele has a new pet project – using the country’s bitcoin profits to help build an animal hospital.

Bukele, who proclaimed bitcoin as legal tender on September 7, tweeted last weekend that the country had earned a surplus of US$4 million on its bitcoin reserve thanks to the surging price of the dominant cryptocurrency, up 17 percent in the past week alone.

El Salvador has accumulated 500 BTC over the past month, Bukele having bought the dip three times to bring its total reserve to 700 BTC.

Bukele says he will sink the US$4 million profit into a “pet hospital”, posting a computer-generated video of the project:

Bukele boasted that the pet hospital would be able to attend 384 consultations and 128 emergencies. He also tweeted: “By the way, we’re not selling any #BTC, we are using the USD part of the trust since the #BTC part is now worth more than when the trust was established.”

The government of El Salvador, a Central American republic beset by poverty and hyperinflation, has a bitcoin trust to facilitate transactions between US dollars and the crypto asset. Chivo is the name of both the trust and the commission-free wallet Salvadoreans can use to send remittances and make digital payments to businesses, either in dollars or bitcoin. 

According to Bukele, the trust now has a US$4 million surplus. Chivo can dispose of those millions without affecting the total amount in the trust, which retains the same quantity of bitcoin even when the US dollar amount goes down. 

Bitcoin Law Continues to Divide the Country

El Salvador uses the US dollar but businesses are also required to accept bitcoin as payment – if they have the technology to do so – as part of the country’s Bitcoin Law. The law was Bukele’s idea and has been nothing if not divisive – last month, thousands of Salvadoreans took to the streets to protest against it. Parts of the crypto community have endorsed the law, though institutions such as the World Bank say it will be problematic to enact.

Last month, Bukele announced that El Salvador would exempt foreign investors from taxes on their bitcoin profits to stimulate and hopefully increase foreign investment.

In July, the president foreshadowed that the nation’s abundant geothermal energy would be harnessed to mine Bitcoin, which according to conservative estimates could produce approximately 20,000 BTC per year and generate a profit of more than A$1 billion.

Now Bukele has his pet hospital plan in train, perhaps he might use some of these future bitcoin profits to alleviate living conditions for El Salvador’s long-suffering populace.

Maybe even build a human hospital or two?

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