Shambhavi SoniEl Salvador will become the first country in the world to make bitcoin a legal tender on September 7.
Bitcoin is a digital currency that may be sent from one Bitcoin user to another. Its value is not backed by the central banks of any country. Cryptocurrency is the name given to several types of money.
However, merchants of items in El Salvador’s capital’s “Excuartel” market are furious because officials have not come to explain how it will function.
The anxiety is felt throughout the Central American country of 6.4 million people, not just in San Salvador’s “Excuartel” market.
“We have no idea what the currency is. We have no idea where it originates from. Claudia Molina, a 42-year-old T-shirt and souvenir seller, said, “We don’t know if it’ll make us money or not.”
“They haven’t provided us with any training. They haven’t told us what we’ll use or how we’ll make the change,” she continued.
Bukele’s preps for the new dawn
President Nayib Bukele’s government has installed one of 200 banking machines at the “Excuartel” market. people expect them to make it possible to withdraw bitcoins or convert them to US dollars without incurring additional fees.
The Reuters news agency spoke with some market dealers and shoppers. They claim that no authority has explained how bitcoin works, hence the majority of people say they will not use it at first.
According to public opinion polling conducted in July, three out of four Salvadorans were concerned about the bitcoin plan.
Around 300 demonstrators recently had a march against El Salvador’s Congress, demanding the repeal of the new bitcoin law.
One protestor held a banner that read, “Bukele, understand – in El Salvador, we don’t want bitcoin.”
Another protestor, Roxy Hernández, a 29-year-old student, stated that most Salvadorans do not want to use bitcoin because they do not comprehend the legislation.
Although Bukele has stated that it is not compulsory for vendors or buyers of goods, the legislation specifies that sellers must accept bitcoin payments. “The bitcoin law is arbitrary on the part of the government,” as per Roxy.
The law has been defended by Bukele. He stated that the country will not force the adoption of digital currency. He also stated that with bitcoin, Salvadorans living in other countries will be able to transfer money to their family without incurring additional fees.
Last Monday, Bukele stated on his Twitter account, “Once it’s in effect, everyone will realise the benefits.”
Bitcoin, according to Bukele’s critics, is unsafe for two reasons. The value of cryptocurrency fluctuates every day. They’re also concerned that unscrupulous authorities could use it to move money unlawfully.
“(The) bitcoin law offers a lot of surprises,” said Steve Hanke, a Johns Hopkins University economist.
The bitcoin scheme, according to Hanke, would be “inconceivable” if it did not follow the Financial Action Task Force’s rules (FATF). It is an intergovernmental group that works to stop corrupt officials from moving money illegally.
what do speculators say?
El Salvador has had one of the lowest rates of inflation in Latin America since adopting the US dollar as its official currency in 2001. Critics say that using a cryptocurrency could lead to more inflation because its value fluctuates frequently and in considerable quantities.
“I favour the dollar since we are familiar with it and understand it well. But because we don’t know how (bitcoin) will function, we don’t know how it will work,” Jose Guardado, a farmer north of San Salvador, said.
The World Bank and the International Monetary Fund have expressed concern over bitcoin’s use due to environmental and transparency concerns. El Sal’s credit rating saw a downfall by Moody’s after the bitcoin law.
Bukele’s proposals, according to Hanke, will result in economic problems.
“This would mean yet another surge of migrants from an insecure Central American failed state for the United States,” he warned.