Although it is called “one of the biggest announcements in Bitcoin history,” the market seems to be confused by the landmark news that the current president of El Salvador will submit legislation to recognize Bitcoin as legal tender.
At the Bitcoin Conference in 2021, Zap’s CEO Jack Mallers (the developer of a previously low-key Lightning Network wallet app called Strike) showed off Salvador’s President Nayib Bukele’s A short video in which the leader of the 104th largest economy in the world announces historic legislation. Strike is currently rated 3.2 stars (out of 5 stars) in the Google Play store.
“Next week, I will submit a bill to Congress to make Bitcoin a legal currency,” Booker said in the video.
-Nayib Bukele (@nayibbukele) June 5, 2021
Booker, described as a strongman and dictator, consolidated his power last month by firing five judges and the country’s attorney general.A person claiming to be El Salvador recently posted on Reddit that the move would be popular Whether it is with Buckler’s absolute majority party, or with ordinary people.
This move has been awaited in the Bitcoin circle for a long time, and some people speculate that nation-states will accept, trade, and hold the world’s largest digital assets as part of the national treasury reserve.
A tweet by Bitcoin advocate Caitlyn Long pointed out that this may be a “backdoor” way for banks to process and custody BTC:
1/ About a historic day #Bitcoin: #El Salvador The president publicly announced his support for the legislation #BTC legal tender. *If* it does become law, it will have many secondary effects.You have to be strong in what may be cominghttps://t.co/BrrNxaLzpZ
-Caitlin Long (@CaitlinLong_) June 6, 2021
Although the news aroused widespread excitement at the meeting, the market reaction was not moderate. BTC remained flat for 24 hours and fell 3.5% in 14 days.
The partially silent response may be partly due to the fact that the exact nature of the announcement is unclear. A self-proclaimed hacker on Twitter pointed out that Strike is not untrustworthy and censorable, which means that this implementation of BTC as legal tender will not become the anarchic capitalist utopia that some currency holders desire.
Try to install strike, the app will be used to pay with Bitcoin in El Salvador. It looks like it is not unlicensed and managed, which means they can block your account and funds at any time.https://t.co/9wRD5w8DVo pic.twitter.com/wy6N1nIgp0
— Patrick Alchod (@patcito) June 6, 2021
Although it did not change the market, Bukele pointed out in a recent tweet that the new policy may be an important boon for many Salvadorans, especially for more than 70% of the population without a bank account, regardless of the implementation technology:
“Inclusive finance is not only a moral imperative, but also a way to develop the country’s economy, provide credit, savings, investment, and secure transactions.”