How it started and how the Bitcoin Law fared in 2021

How it started and how the Bitcoin Law fared in 2021

Before June 2021, the news about Nayib Bukele would probably not even appeal to many cryptocurrency users. El Salvador’s president made headlines for accusations of corruption and dictatorial behavior after the parliamentary majority of his party removed five members of the country’s Supreme Court and its attorney general.

However, during the Bitcoin 2021 conference held in Miami, Bukele surprised many participants and attracted international attention by announcing that he planned to have El Salvador adopt Bitcoin (BTC) as legal tender. In less than a week, a supermajority of the Salvadoran Legislative Assembly (the majority of Bukele’s own party) had approved the Bitcoin Law, that forces all commerce and businesses to accept the cryptoactive as a form of payment along with the US dollar.

Bukele’s involvement in cryptocurrency adoption seemed to go beyond what many would have expected from a world leader. El Salvador’s president was already active on social media and presented himself differently from many other politicians, often dressed casually in a baseball cap and jeans. Since the Bitcoin Law came into effect in September, he has used his Twitter account to announce various purchases of BTC for a total of 1,370 BTC, more than $ 64 million, presumably from the national treasury of El Salvador. He also proposed that the country take advantage of geothermal energy from its volcanoes to mine the cryptocurrency.

At the local level, opposition to the Bitcoin Law manifested itself in the form of public statements by lawmakers unrelated to Bukele’s political party, as well as protests in San Salvador. Before the law took effect on September 7, a group of retirees, veterans, disability pensioners and workers marched through the capital to express their concern about the volatility of the cryptoasset. and how the Bitcoin Law could affect your pensions. The protesters, calling themselves the Bloc de Resistencia y Rebeldia Popular, carried banners with the slogan “No to Bitcoin” in the streets to demand the repeal of the law.

Officials outside of Bukele’s sphere of influence also expressed skepticism about the adoption of Bitcoin. In June, Victoria Nuland of the US State Department encouraged El Salvador to take a “hard look” on Bitcoin to ensure that the crypto asset was “well regulated” and “transparent”, and that the government offered protection “against malicious actors”. The International Monetary Fund issued its own warning in July, saying that the consequences of a country adopting Bitcoin as its national currency “could be dire.”

In addition to helping establish the regulatory framework for the adoption of BTC payments, Bukele promoted efforts to build the necessary infrastructure so that El Salvador’s businesses and citizens could use the cryptocurrency. The country already has the Bitcoin Beach, an area in the town of El Zonte that aims to be an experiment in which “Bitcoiners” can use the cryptocurrency to pay for anything, from utility bills to tacos. Authorities have also overseen the installation of hundreds of Chivo ATMs, which allow Salvadorans to withdraw dollars in cash 24 hours a day without paying commissions for their cryptocurrency holdings.

Read:  China returns to the Bitcoin mining map, but clandestinely

However, the announcement that likely stands out as the most ambitious of Bukele’s 2021 Bitcoin plans was the creation of a Bitcoin City. initially funded by $ 1 billion in BTC bonds. Cryptocurrency exchange Bitfinex and Blockstream have already said they plan to support the initiative, which will reportedly aim to not pay taxes on capital gains, income, property or payroll.

Criticism of Bukele for ruling as an authoritarian has not necessarily been mitigated with the launch of the Bitcoin Act, but the coverage is often accompanied by his “buy on the drop” statements, the proposal of a 24-hour Bitcoin news network and other cryptocurrency-related developments in the country. There is little indication that the president has ceased to identify himself as the “world’s coolest dictator in the world,” a biography on Twitter later changed to “CEO of El Salvador.”

Before the approval of the Bitcoin Law, the police detained a resident of San Salvador who had spoken out against the country adopting Bitcoin as legal tender. In October, following several protests against Bukele’s policies, the government banned the rallies, claiming its actions were intended to prevent the spread of COVID-19, yet it still branded sporting and cultural events as exemptions.

“The Cryptocurrency Community Backing Bukele Of All People Shows They Need To Think A Little More […] this guy is an authoritarian who cannot provide basic services to his citizens “, He said Tommy Vietor, a political commentator from Pod Save the World. “[El Salvador tiene] one of the highest murder rates in the world. You seem to believe that you can get power by plugging your Apple charger into a volcano somehow. Don’t try to sell us a technological utopian city literally fueled by a volcano, let’s start with something smaller. “

As of the end of 2021, it is unclear if the average citizen of El Salvador is reaping many benefits from the Bitcoin Law. Bukele announced in October that animals would benefit from cryptocurrency with the construction of a $ 4 million veterinary hospital, financed from the proceeds of the country’s Bitcoin trust. However, it is likely that the Latin American nation is still struggling to cope with the volatility of the crypto asset when used as a medium of exchange, as well as to gain the understanding and acceptance of its population.

Keep reading: