El Salvador will make history tomorrow, Tuesday, by becoming the first country in the world to give legal tender to bitcoin.
As a measure to promote the adoption of the cryptocurrency, the government decided to grant $ 30 in free bitcoins to citizens who register in their national digital wallet, known as “Chivo” or “cool” in English. And foreigners who invest three bitcoins in the country will be granted residency.
However, hundreds of citizens have taken to the streets in protest against the measure, as reported by various local and foreign media.
Opponents of the measure warn of drastic fluctuations in the value of cryptocurrency and the impacts it could have on poorer communities, many of which do not have access to bank accounts or smartphones.
Despite the population’s concern, the president of El Salvador, Nayib Bukele, maintains that it will be good both for them and for the country’s economy.
For this reason, the president has gone ahead with his plans to install around 200 ATMs of this cryptocurrency throughout the country, in which Salvadorans will be able to convert bitcoins into US dollars and withdraw them in cash.
According to Bukele, with this digital currency, Salvadorans living abroad will not have to pay remittance fees, which in 2020 accounted for almost a quarter of El Salvador’s GDP.
Against the volatility and opacity of bitcoin
As documented by elEconomista.es, shouting “No to corrupt money laundering!” and “We do not want bitcoin”, some protesters have denounced that, while the US dollar – the official currency of the country to this date – has proven to be stable over time, bitcoin is known to constantly change in value, in addition to being a conducive mechanism to carry out money laundering.
Salvadorans are not the only ones who have shown reluctance in the face of President Nayib Bukele’s decision. According to Business Insider, both Moody’s and Fitch Ratings warned the high risks of this initiative and its hasty application as the reason for the downgrading of the sovereign debt of El Salvador and of local insurers. (With information from agencies).