savior On Tuesday (7), it became the first country to adopt bitcoin as legal tender, an experience that differs in expert opinion.
On the other hand, proponents say it will reduce commission costs to billions of dollars sent from abroad.
On the other hand, critics of the change warn that the adoption of bitcoin could lead to money laundering.
The change means that businesses must accept payments in bitcoin along with the US dollar, which has been El Salvador’s official currency since 2001 and will remain legal tender.
President Neb Bukele who has been lobbying for the adoption of Cryptocurrency, he says will help Salvadorans save about $400 million that the government estimates to spend annually in remittance commissions.
The 40-year-old president is popular with the public, but has been accused of undermining democracy in the country, including by the Biden government in the United States.
Doubts say bitcoin could increase the country’s regulatory and financial risks, and polls show Salvadorans are concerned about the cryptocurrency’s volatility, which could lose hundreds of dollars in value a day.
To a skeptical audience, Bukele promised all citizens $30 worth of bitcoin if they signed up for a government digital wallet.
before launch, El Salvador Bought 200 BitcoinBukele said, helping to push the coin above $52,000 for the first time since May.
By dawn Tuesday, the wallet had not yet appeared on Apple Inc.’s app download platforms. and Google and Huawei, creating a series of tweets from Bukele, including one with a red “Rage” icon.
The wallet was later provided by Huawei. Some citizens are optimistic.
“It would come in handy…we have families in the US and they can send money for free while banks charge fees,” said Rena Isabel Aguilar, who owns a beach store in El Zonte, about 30 miles southwest of the capital. San Salvador.
ATMs will convert bitcoins to dollars
Known as Bitcoin Beach, El Zonte aims to become one of the world’s leading bitcoin economies.
Before the launch, the government installed an ATM that will allow bitcoins to be converted into dollars and withdrawn without commission from a digital wallet called Chivo.
On Monday (6), Bukele tried to temper expectations for quick results and asked for patience.
“Like all innovations, the Bitcoin operation in El Salvador has a learning curve. Every path to the future is like this and not everything will be achieved in a day or a month.”
Volatility and the possibility of money laundering cause fear
The cryptocurrency has been notably volatile, rising to over $64,000 in April and dropping nearly $30,000 in May this year.
The move to legalize bitcoin alongside the US dollar has clouded the prospect of El Salvador’s pursuit of more than $1 billion in funding from the International Monetary Fund (IMF).
Analysts fear that the adoption of cryptocurrency could lead to money laundering in a country with serious problems related to government corruption and organized crime.
Bukele promised to stamp out corruption, but the Biden government recently put some of its close allies on a corruption blacklist.
In just two years in office, he assumed control of nearly every level of power.
Last week, the top justices appointed by his allies decided he could serve a second term.
Moody’s downgrades El Salvador’s credit score
After the bitcoin law was passed, rating agency Moody’s downgraded El Salvador’s credit quality, while dollar-denominated state bonds came under pressure.
But Bukele, who isn’t shy about controversy, on Monday retweeted a video that showed his face superimposed on actor Jaime Fox in a scene from “Django Unchained,” Quentin Tarantino’s film about American slavery.
The video showed Bukele hitting his face with the International Monetary Fund logo stamped on his face. Later, Bukele erased the retweet.
In his private tweet, Bukele said: “We must break the paradigms of the past. El Salvador has the right to advance to the First World.”
(With reporting by Anthony Esposito and Nelson Renteria; Additional reporting by Wilfredo Pineda in El Zonte, El Salvador; Editing by David Gregorio and Catherine Evans)
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