The adoption of Bitcoin as legal tender in El Salvador is encountering resistance, but its president Nayik Bukele is confident in the potential it has to offer as “the new money of the 21st century.”
La Bitcoin Law, as the bill presented by the president of El Salvador is known Nayik Bukele and approved by the Legislative Assembly recently to make BTC a legal tender in the country, is encountering resistance from banks, businesses and some users who fear the volatility characteristic of the cryptocurrency.
On commercial banks from El Salvador say they support the initiative, but that they will stick with the US dollar for “convenience” for financial and accounting matters. For its part, some merchants, businessmen and citizens They do not agree with the “mandatory” nature of the law regarding the use of Bitcoin. Two deputies from the opposition party They assure that imposing the use of cryptocurrency in the country violates the essential rights of citizens, while the World Bank (WB) rejection the request for help from the Salvadoran government to implement the Bitcoin Law, arguing that bitcoin is involved in environmental conflicts and that it provides little transparency in its transactions.
However, despite the reactions and resistance shown by some sectors, Bukele is confident in the potential of Bitcoin as a financial system and means of payment, which will help lift the country's economy and protect its citizens from the negative impacts of fiat money inflation, among other potential benefits.
It is important to remember that although the Bitcoin Bill was approved on June 9 by the Assembly of El Salvador, it will not come into effect until next September, which the government estimates is sufficient time for merchants and the population in generally learn more about Bitcoin and how it works.
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Clarifying myths and doubts about Bitcoin in El Salvador
Mandatory use of Bitcoin
“Every economic agent must accept bitcoin as a form of payment when it is offered by the person purchasing a good or service.”
Although the Bitcoin Law of El Salvador indicates that businesses and businesses must publish the prices of their products and services in bitcoins and must accept the cryptocurrency as a means of payment, the country's president Nayik Bukele established a 150 million dollar fund so that merchants who do not want to hold bitcoins can transform the cryptocurrencies received into dollars immediately. In this way, El Salvador provides a means for those who do not want to be affected by the characteristic volatility of Bitcoin in the markets.
It is worth remembering that the cryptocurrency will coexist with the US dollar within the country's financial system. In addition, businesses and businesses that do not have the necessary technologies, such as Internet access, to accept and process payments in bitcoin, are excluded from the Bitcoin Law until the government provides them with the necessary resources.
Bitcoin generates distrust
Those who argue that Bitcoin is a non-transparent and trustworthy system do not really know how it works or the characteristics of the technology. blockchain.
The World Bank has said it cannot support El Salvador in implementing Bitcoin as legal tender due to “environmental and transparency deficiencies”, But El Salvador is developing a crypto mining project that will use geothermal energy, completely free of carbon emissions into the environment.
On the other hand, worldwide, close to 75% of miners connected to the Bitcoin network use clean energy sources, so the blockchain network consumes less than half the energy that the traditional banking system spends to operate, according to a study published by Galaxy Digital in May.
As for the level of transparency of your transactions, there are many misconceptions about it. Some governments view bitcoin as a form of money that favors criminals, but nothing is further from the truth.
Bitcoin is a decentralized and public network where anyone anywhere in the world can verify and audit the operations carried out. Furthermore, thanks to the immutability and security of the network, all operations carried out with the cryptocurrency are recorded on the chain; and once this happens, they cannot be deleted or modified. So the transactions will remain recorded in the blockchain forever. This feature of Bitcoin has been very helpful to various law enforcement agencies and governments around the world, who have been able to track funds and dismantle criminal gangs who believed they could hide from the law using bitcoin.
Difficult access to cryptocurrency
Although El Salvador currently faces a technological gap, several of its communities and populations have Internet services and computer and telephone equipment that will allow them to access Bitcoin. In fact, one of the reasons that Bukele highlighted when he announced his Bitcoin Bill was precisely to promote financial inclusion through the alternative financial system offered by cryptocurrency.
In El Salvador, only about 40% of the population has access to the traditional financial system, the other 60% do not have banking products, such as savings accounts, cards, nor do they have access to credit or financing from banks, therefore what a large part of the country's economy is informal.
To boost the adoption of Bitcoin, Bukele is reducing the technological gap in the country by providing computers with Internet access and training citizens in the use of the cryptocurrency, he indicated. Dania Gonzalez, leader of the Finance Committee in the Congress of El Salvador.
On the other hand, an ATM company will make between 1.000 to 1.500 ATMs available to citizens to facilitate access to cryptocurrency efficiently, safely and without complications.
A hasty decision
Many in the Central American country celebrate the adoption of bitcoin as legal tender. On the contrary, there are those who criticize the decision and claim that it was made hastily and without adequate analysis. Those who believe the latter also point out that the adoption of BTC can bring many unknown risks, since no country in the world had made this decision.
While it is true that El Salvador is the first “bitcoin nation” globally, many Latin American countries are following in its footsteps. Recently, Congressman Gabriel Silva of Panama announced that he will present a bill to promote the integration of Bitcoin within its financial system, adopting El Salvador's initiative that points towards technological innovation, entrepreneurship and development.
In addition to Panama, politicians from other countries such as Argentina, Mexico, Colombia, Brazil and Paraguay are also promoting new policies to become the next “bitcoin nations.” Cities like Miami are also seeking new regulations that allow them to invest in cryptocurrency and boost their mining.
On the other hand, Bitcoin, a global and decentralized cryptocurrency, has more than 100 million users around the world, so it can be used without limitations or geographical barriers.
“The new money of the 21st century”
Bitcoin is synonymous with innovation and development, so Michael saylor, CEO of MicroStrategy, considers cryptocurrency “the money of the future.” On his Twitter account, Saylor highlighted the actions of El Salvador as the driver of the new digital economy of the 21st century.
Saylor noted that the dollar will continue as the world's reserve currency, but that it will move “on the rails of Bitcoin” to extend to billions of people globally. The CEO of MicroStrategy assured that Bitcoin is not in conflict with the dollar as many believe, and that the cryptocurrency will continue to grow in use and adoption due to the open and reliable digital network that it offers to everyone equally.
Trust and security in Bitcoin
Despite the refusal of some sectors towards the Bitcoin Law, the president of the nation trusts in the potential of the cryptocurrency as a virtual and intangible currency, impossible to falsify or duplicate, global and decentralized which will also serve as a financial investment instrument for economic growth and for the protection and safeguarding of value to future.
Bitcoin adoption in El Salvador is growing. As he pointed Bukele on Wednesday, remittances using BTC grew 4 times in May since the announcement of the new law and search interest for the term “El Salvador Real Estate” increased Shooting to levels never seen before.
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