2021 may go down in history and become Bitcoin (Bitcoin) The most interesting year, given its recent adoption by billionaires and mainstream institutions, not to mention El Salvador’s move to make it legal tender.
As far as El Salvador is concerned, it seems that the whole world is paying attention to this experiment to see if it is a success or a complete failure for this Central American country.
September 7th marked the official implementation of Bitcoin as legal tender in El Salvador. A wave of protests against this move in the country caused doubt and uncertainty about how the new law will be implemented.
From the arrest of individuals criticizing the new laws of the Salvadoran government to the wave of protests by citizens across the country against the legal status of Bitcoin, pioneering cryptocurrencies are facing some resistance.
How Bitcoin became legal tender
It all started in early June, after El Salvador’s President Nayib Bukele announced on Twitter that the country’s legislative assembly had already A bill was passed to make Bitcoin legal tender. The law is scheduled to be implemented on September 7, when the country’s 4.5 million citizens will be able to use Bitcoin to shop in stores across the country.
Bukele said in his statement that once the official bill to make Bitcoin legal tender is passed, “Chivo ATM”-Chivo is the name of the official BTC wallet in El Salvador-will eventually be “ubiquitous” in the country. This will allow Salvadorans to withdraw bitcoins in cash without incurring any commissions on their bitcoin holdings, as is the case with services such as Western Union.
In addition, Bukele assured citizens that No one will be forced Use Bitcoin. In a statement, the 40-year-old president said, “There is always someone who can line up at Western Union and pay commissions.”
“What if someone doesn’t want to use Bitcoin? [Well] Do not download the app and continue to live a normal life. No one will take your dollars,” he said.
First wave of resistance
After the announcement, A group of protesters A block known as the Mass Resistance and Rebellion Block (BRRP) appeared to protest the Bitcoin law.
“President Nayib Bukele passed the law to make cryptocurrency legal tender in the country without proper consultation with the people,” one activist said.
Although the protest group emphasized the complexity of Bitcoin as a reason for caution, their main claim is that the law mainly serves large companies involved in money laundering in order to seek the benefit of corrupt officials.
A protester said: “Bitcoin only provides money laundering services for some large businessmen, especially those who have connections with the government.”
A letter from the BRRP Group stated, “Entrepreneurs who invested capital in Bitcoin will not pay taxes on their income, and the government will spend millions of dollars to execute the entire campaign.”
In fact, the bill to make Bitcoin legal tender Including some interesting proposals For example, zero capital gains tax is imposed on BTC. The bill also promises investors to obtain three BTC investments in El Salvador, thereby obtaining permanent residency in the country.
Mario Gomez arrested
As the controversial Bitcoin bill became law on September 7, supporters and opponents continued to emerge. The latest incident surrounding the law was the arrest of Mario Gómez.
According to reports from several local news media in El Salvador, computer and encryption experts and a fanatical critic of the government Mario Gómez (Mario Gómez) have been Arrested by the local police He was detained for several hours before being released.
As we all know, Gomez often posts on social media against the government’s move to make Bitcoin a legal tender.
Observers such as Johns Hopkins University economist Steve Hank criticized Gomez’s arrest as “the action strategy of authoritarian police.”
Hector Silva, an adviser to the Office of the Mayor of San Salvador, said: “Mario’s arrest portrays the government’s vulnerability in Bitcoin law enforcement, but confirms something more dangerous.”
“They are willing to manipulate any necessary institutions to eliminate criticism,” Silva added.
Although the police issued a statement saying that Gomez was detained for financial fraud investigations, news reports indicated that he was arrested without a warrant and tried to take possession of his mobile phone and computer.
Just before Gomez’s arrest, El Salvador’s retirees took to the streets to protest, fearing that the government would use unstable cryptocurrency to pay their pensions.
although Speaking A demonstrator in the crowd-including veterans, disabled pensioners, workers and retirees-told reporters: “We know that this coin fluctuates greatly. Its value changes from second to second. , We cannot control it.”
Although Bukele promised that the use of Bitcoin in the country is optional and that salaries and pensions will still be paid in U.S. dollars, the protesters still emphasized the lack of understanding of the technology.
Citizens also complained that officials had too little explanation of the pros and cons of Bitcoin.
“We don’t know the currency. We don’t know where it comes from. We don’t know whether it will bring us profit or loss. We don’t know anything,” an Salvadoran added.
In response, the Booker government has statement The use of Bitcoin is not mandatory, and necessary training and other Bitcoin alternatives will be provided.
A recent poll conducted by José Siméon Cañas of the University of Central America in El Salvador showed that as many as two-thirds of the respondents are inclined to repeal the law, and more than 70% of the respondents prefer the U.S. dollar to Bitcoin.
International institutions such as the International Monetary Fund also warn Regarding the macroeconomic, financial and legal issues brought about by the adoption of Bitcoin in El Salvador.
Siobhan Morden, Amherst Pierpont Director of Fixed Income Strategy in Latin America, Said “Under an increasingly authoritarian regime, Bitcoin’s plan may only exacerbate concerns about corruption.”
on the other hand, Others remain optimistic Given that El Salvador’s economy relies heavily on remittances sent home by overseas immigrants, the new law will ultimately benefit Salvadorans. Last year alone, the country’s total remittances reached US$6 billion, accounting for one-fifth of the country’s GDP.
“El Salvador has adopted Bitcoin as legal tender in accordance with the law, providing the country with some options in financial affairs and sovereignty,” said Alexander Blum, managing director of Two Prime.
His views were endorsed by the artist and entrepreneur Alberto Echegaray Guevara, who said: “President Buckler’s Bitcoin law not only tries to make 70% of people without bank accounts International remittances for the population have become cheaper and easier, and it has also created a new economic center and a new Central American remittance platform.”
Adrian Pollard from HollaEx told Cointelegraph, “The introduction of new technologies usually involves errors and coexistence, but that’s why it becomes voluntary.”
“I suspect there will be more bumps on the road in El Salvador, but it is worth it in the long run. In fact, I believe other South American countries are not far behind and will follow suit,” Pollard added.