The eyes of technology lovers from around the world will be on El Salvador this Tuesday. The small country of just over 6.4 million inhabitants will become the first in the world to adopt Bitcoin as legal currency, as stipulated by a law that was expressly approved last June by a Parliament controlled by the president’s party. Nayib Bukele, without giving many explanations to the Salvadorans. The decision to legalize the circulation of that currency, which together with the US dollar will be the official currency, came a few days after the president announced his plan at an international conference on virtual money held in Miami.
Faced with the enthusiasm with which the Bukele Government has promoted the use of virtual currency, a measure that is very well received in the world geek internationally, many Salvadorans are concerned about how their country will become a world laboratory for cybercurrency, with the uncertainty that this entails. Furthermore, the operating rules are not entirely clear. The president said that the use of Bitcoin will be optional, but the text of the law reads that “every economic agent” is obliged to accept it “as a form of payment when it is offered to him by whoever acquires a good or service.”
As explained by the president, in order to use virtual currency, Salvadorans must download a virtual wallet called ‘Chivo Wallet’ (a word that in that country is used to describe something “cool” or “cool”). With this application, citizens will be able to withdraw dollars from the 200 ATMs (‘Chivo points’) that the Government has installed throughout the country. In addition, those who install the application on their cell phones will receive a bonus equivalent to $ 30 in Bitcoin, which cannot be converted into dollars.
The law also indicates that the exchange rate between these two currencies “will be freely established by the market,” which has generated concern among citizens and experts about the volatility of a currency that is not in official use in any other country in the world. world. Bukele continues to enjoy very high levels of popularity, above 70%, but the decision to adopt Bitcoin, which he announced at a conference in Miami and in English, has generated suspicions inside and outside the country.
Several surveys published in recent weeks show that the majority of the population rejects the measure, including one from the University Institute of Public Opinion of the Central American University that indicated that 66.7% of Salvadorans believed that the Bitcoin Law should be repealed. In addition, 78.3% of citizens said they were not interested in downloading the ‘Chivo Wallet’, while 71.2% said they preferred to use the dollar.
On the other hand, different groups of citizens have taken to the streets to request the repeal of a measure that they consider imposed and that will generate “legal insecurity” and “could be used to defraud users and facilitate money and asset laundering”, as Idalia Zúniga, from the Bloque de Resistencia y Rebeldia Popular, said in one of those protests.
Bukele argues that the adoption of cryptocurrency will economically benefit Salvadorans, especially those who receive remittances from abroad. In August, the president pointed out that his country’s citizens abroad pay “400 million dollars in commissions” annually to send money to their relatives. “Only that saving will be a huge benefit for our people (or at least for whoever wants it),” he wrote on his Twitter account.
According to official sources, remittances benefit 1.63 million citizens. In 2020 alone, Salvadorans’ shipments abroad totaled more than 5.9 billion, representing more than 20% of the country’s gross domestic product. And while the Salvadorans who send and receive remittances navigate in uncertainty about how they will be used, Bukele, who continues to receive criticism from the international community for his authoritarian coups, chooses to attribute the criticism exclusively to his political rivals.
“The awkward opposition always plays one-step chess. They have bet everything to scare the population about the Bitcoin Law and they may achieve something, but only until September 7. Once in force, the people will see the benefits, they will be left as liars and they will lose double ”, wrote the president in Twitter at the end of August. This Monday, in that same social network, he began to heat the ground for the implementation of the currency with messages in which, again in English, he announced the purchase of the first 200 Bitcoin coins. “Tomorrow, for the first time in history, all the eyes of the world will be on El Salvador. Bitcoin has done it, ”he wrote in another of his tweets.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.