21.2 C
New York
Friday, September 24, 2021

Buy now

El Salvador adopts bitcoin as legal currency today, amid doubts and rejections

The Bukele government assures that the controversial measure will contribute to the bankingization of the population and will prevent a loss of 400 million dollars in the remittances that Salvadorans send from abroad and that represent 22% of GDP, although some experts question it.

In El Salvador, which dollarized its economy two decades ago, the majority of the 6.5 million Salvadorans reject the bitcoin promoted by Bukele and prefer to continue using the greenback, according to the latest surveys.

“That bitcoin is a currency that does not exist, it is a currency that is not going to favor the poor but the wealthy, because one of the poor, what can he invest, if we barely have enough to eat?”, Said José Santos Melara , a veteran of the civil war (1980-1992) who on Friday participated in a protest against cryptocurrency.

Seven out of 10 Salvadorans indicated that they “disagree or strongly disagree” with bitcoin, which will circulate alongside the dollar, indicated a recent survey by the Central American University (UCA) that consulted 1,281 people in mid-August.

65.7% of the more than 1,500 consulted in another poll by the newspaper La Prensa Gráfica said they disapprove of the cryptocurrency.

The director of the Public Opinion Institute of the UCA, Laura Andrade, assures that the population is resistant to bitcoin because they do not consider it a way to improve their economic situation.

“They are decisions [de forma] It is unaware that this administration has taken this administration together with the legislators, and that we see that people do not perceive a positive impact to significantly transform their living conditions, ”Andrade explained to AFP.

The UCA survey indicated that 65.2% of the population is not interested in downloading the electronic wallet “Chivo” necessary to make purchases and sales in bitcoins, and does not agree that the government grants the equivalent of $ 30 as an encouragement to cryptocurrency users, as you have decided.

But Jorge García, a 34-year-old hairdresser who has been using bitcoin for three years, believes that it “has a future” and hopes that it will “rise in value.”

The Legislative Assembly, akin to Bukele, approved the bitcoin law in June and at the end of August endorsed a trust of 150 million dollars to guarantee the “automatic convertibility” of bitcoin to the dollar.

The law establishes that the exchange rate between bitcoin and the dollar “will be freely established by the market” and obliges to “accept bitcoin as a form of payment.”

The Government installs more than 200 “Chivo points”, bitcoin ATMs throughout the country, some guarded by the Army to prevent possible damage at the hands of opponents.

Economists and organizations such as the World Bank, the IMF and the Inter-American Development Bank (IDB) are skeptical about the adoption of bitcoin as legal tender alongside the dollar.

It will have a “negative impact” on the living conditions of the population given the “high volatility of the listing price”, and “will affect the prices of goods and services”, says economist Óscar Cabrera, from the University of El Salvador .

Dealing with bitcoin will be like “the perfect storm in which we come on the Titanic and no one is driving,” said Cabrera, former president of the Central Reserve Bank of El Salvador.

The fact that its price is determined “exclusively by the market” makes bitcoin “highly volatile,” warned the Salvadoran Foundation for Economic and Social Development (Fusades).

The Foundation also considers it “unconstitutional” to impose “the mandatory acceptance of bitcoin as a form of payment when it is offered” in any economic transaction. Encouraged by a high public approval, but criticized by several measures considered authoritarian and that affect the independence between the powers of the State, Bukele defends his decision and has called the opposition “clumsy” for “scaring” the population about cryptocurrency . The United States has asked El Salvador to have a “regulated”, “transparent” and “responsible” use of bitcoin, and “to protect itself from evil actors.”

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: [email protected] Phone: +1 513-209-1700

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles