Using bitcoin as legal tender

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Today El Salvador becomes the first country to adopt bitcoin as a national currency. What will change?

On September 7th bitcoin will become legal tender in El Salvador, alongside the dollar. The Central American country of 6.5m people is the first to attempt such a feat. A week before the big day those who had put plans in place to use bitcoin were the exception, rather than the norm. Three-quarters of Salvadoreans surveyed in July by Disruptiva, a polling firm, were sceptical of the plan to adopt bitcoin. Two-thirds were not willing to be paid in it and just under half knew nothing about it.

Legal tender is ordinarily defined as the money that courts of law must accept to settle debts. But El Salvador’s bitcoin law goes further, saying that businesses must accept the cryptocurrency as payment for goods or services. It has also come into effect very quickly. Nayib Bukele, the country’s president, who controls a large majority in the legislative assembly, announced his plan to make bitcoin legal tender at a cryptocurrency conference on June 5th.

Sceptics have posited that the move is just a stunt: a sop to Ibrajim and Yusef Bukele, the president’s brothers, who are crypto-enthusiasts. But the president claims the move will help El Salvador win foreign investment and reduce the cost of remittances. He may not be entirely wrong. The gambit might lure in deep-pocketed crypto-investors . And its experience may provide a case study in whether one of the long-touted benefits of bitcoin works for regular people.

The attempt will probably reveal bitcoin’s limitations, too. Many locals understandably fear its volatility, which makes it ill-suited for payments and debt. Those accepting it, like Leyendas, do not quote prices in it, but convert from dollars at the point of sale. And there can be unexpected fees, which might stymie its use. There are 200 bitcoin cash machines being installed across the country to enable cash dollars to be converted into bitcoin in digital wallets.

 

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Oh well the IMF and world bank have been right about everything so they must be obeyed. Oh what's that! They routinely get everything wrong?

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everything in its time

Too many swings in value, even during the same day.

Fails to mention a key tenant of the law: El Salvador will convert BTC to USD at point of purchase for merchants wishing to take USD.

Bad idea.

Nothing.

🤔

Some hope and then lots of misery

🇸🇻 What will be the implications of bitcoin implementation in El salvador? Thread with two possible scenarios: success and failure.👇

It will be transformative for the entire world. Forex markets are about to get orange-pilled.

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