The president of El Salvador, Nayib Bukele, announced in June that Bitcoin would be a legal tender in El Salvador, a pioneering measure in the world. This was shortly after he publicly stated his intention to bring a bill aimed at converting Bitcoin to his country’s legislature. in legal currency.
In this way, September 7 will be the day on which officially the most famous of the cryptocurrencies starts in the Central American country as a legal currency and this has raised many opinions, both good and bad.
These days citizens have taken to the streets to protest against this measure and various people have publicly denounced that whoever is openly against the so-called Bitcoin Law may be subject to repression and political persecution.
And it is that the EFE Agency has published that various protesters have said that Mario Gómez, a computer and cryptocurrency specialist who has been critical of the implementation of Bitcoin in the country, has been arrested for, allegedly and according to official allegations, being involved in crimes of financial fraud.
Possible means of corruption
On the one hand, the fact that the law was passed so quickly seems to be causing skepticism in the population. It should be remembered that the President spoke about this possibility, and two days later, the Legislative Assembly, which is dominated by the president’s party, New Ideas, passed the so-called “Bitcoin Law”, a 16-article document, without much discussion in the aforementioned assembly. According to a study presented in July, 77% of citizens did not agree with the Bitcoin Law.
Two other issues of great concern are that can be used as a means of laundering money in a country that already has problems with its corruption and drug trafficking and that It can bring economic problems since Bitcoin is a very volatile currency.
It should not be forgotten that according to the Corruption Perception Index, El Salvador is one of the countries in America (and also in the world) where citizens perceive the most corruption. As published in the Journal of the Mexican University Tec Steve Hanke, an economist at John Hopkins University, he has said that he considers the idea of ”introducing a vehicle of corruption” (the cryptocurrency) in an environment that is already corrupt. ”
For his part, the economist Luis Membreño pointed out to Expediente Público (an investigative journalism magazine in Honduras and Nicaragua) that there is a risk in the use of this currency. in a country marked by drug trafficking and is that it can serve as “a way to hide illegal resources, products of corruption and drug trafficking ”.
The United States has also put on its list of corrupt officials members of the government very close to the president.
The volatility of Bitcoin
On the other hand, we must remember the volatility of Bitcoin, which is increasing its value and falling drastically, and which is something that generates doubts among society.
For example, we have this cryptocurrency Last April it was valued at more than $ 63,000, a few days ago it was worth $ 33,000. The economist César Villalona has told the BBC chain that this means that this large fluctuation can cause a person who is going to buy a shirt with Bitcoin that yesterday was worth the equivalent of $ 30 today no longer reaches it because the value of the cryptocurrency decreased.
Stanley Quinteros, a member of the workers union of the Supreme Court of Justice, has said as an argument of the group he represents and that is against the decision that “we know that this currency fluctuates drastically. Its value changes from one second to another and we will not have any control over it”.
THE HUMBLE PEOPLE DO NOT WANT #BITCOIN, EVERYBODY #We Don’t WantBitcoin, only the #BUKELES they want the #Bitcoin . pic.twitter.com/YeAafHGCqS
– Blanca Huezo (@blanca_huezo) August 26, 2021
In fact, regarding control over such a variable cryptocurrency, El Salvador asked the World Bank for support but they have refused to collaborate. According to a spokesperson for this institution, he told CNN, “we are committed to helping El Salvador in various ways, including for exchange transparency and regulatory processes. While the government reached out to us for help with bitcoin, this is not something the World Bank can support given transparency and environmental deficiencies“of the cryptocurrency.
The one who will support El Salvador in this endeavor will be the Central American Bank for Economic Integration (CABEI). “We reaffirm El Salvador our support for the adoption of this new law that will allow its economy to implement a new payment method.
We are preparing an expert-led technical assistance package to support the country’s economic authorities, harmonizing the needs of users, helping to prevent illicit activities, and avoiding any undesirable impact on financial stability and monetary policy ”, according to Dante Mossi, its president.
Other doubts generated by Bitcoin: de-dollarization of the economy
The currency of El Salvador is the dollar. And President Bukele’s relations with Washington are not very good. For this reason, there are those who believe that the ultimate goal will be to “de-dollarize the economy” by pulling for a decentralized currency such as Bitcoin, something that Bukele has denied. It fits remember that in 2001, El Salvador introduced the US dollar as a legal tender. This displaced the colón as the currency that was used nationally.
The new law will put Bitcoin in El Salvador as a currency of equal validity to the US dollar (current currency of El Salvador). And furthermore, the regulation approved by the legislators, in Article 7, establishes that “every economic agent must accept Bitcoin as a form of payment when it is thus offered by whoever acquires a good or service ”.