When President Nayib Bukele declared to the world that he was making BTC legal tender, he expected to be hailed as a visionary, and he was. What he didn’t foresee was that the people he was forcing BTC on didn’t want it and would fight against the imposition. Now, fresh protests have broken out as Salvadorians say no to BTC, one week before the controversial Bitcoin Law takes effect.
Salvadorians took to the streets waving placards and signs with messages that depicted their aversion to BTC becoming legal tender in their country. “No al lavado de dinero corrupto (no to laundering corrupt money),” one of them read.
Nearly three months since the Salvadorian parliament – where the president’s political party holds an overwhelming majority of seats – voted to make BTC legal tender, it has been nothing but opposition to the law.
Global institutions like the World Bank and the International Monetary Fund (IMF) have voiced their concerns. The World Bank even flat out refused to help the Salvadorian government with the implementation of the Bitcoin Law.
Citizens have taken to the street in protests severally. There are those that have even gone to court to challenge the law, which by all indications, was made in haste and the implications not fully weighed.
Economists across the world have also expressed great concern with the move, with revered economist Steve Hanke calling the president and his accomplices “stupid” for the decision.
A report by the Guardian has further revealed just how opposed the people of El Salvador are to the Bitcoin Law.
Ricardo Castaneda, a local economist, told the U.K. media outlet, “The law was adopted extremely quickly without a technical study or a public debate. I don’t think the president has fully understood the implications of the law, its potential to cause serious macroeconomic problems and convert the country into a haven for money laundering.”
El Salvador doesn’t want BTC
Aside from the protests and the warnings from experts, both within the country and globally, there is data to show that Salvadorians don’t want BTC. A study done a month ago showed that three in four Salvadorians believe President Bukele’s move was not wise.
The study was conducted by the Center for Citizen Studies at a local university. It found that 77% of the citizens view the Bitcoin Law as “not very wise” or “not wise at all.”
And then there’ the president’s defense that “if you don’t want BTC, don’t use it then.” Bukele has implied that no one will be forced to use the digital currency—which is quite slow and has high transaction fees—if they don’t want to.
But this isn’t true either. The Bitcoin Law states that “every economic agent must accept [BTC] as payment when offered to him by whoever acquires a good or service.”
As such, merchants must accept BTC, even if they don’t want to use it, unlike what Bukele has been saying all along. This will be a big problem, especially given that according to the study, 61% of merchants in the country said they will not be willing to accept BTC for payments.
Colombian economist Daniel Munevar told the Guardian that Bukele is forcing a nation in which a majority are trying to make ends meet to subscribe to a speculative asset that has no other use. And he’s right. With fees going as high as $60, BTC isn’t a peer-to-peer digital currency. It has become an asset that the BTC faction has come to market as a store of value.
“The Bitcoin Law essentially gambles with two public purses, that of the El Salvador government and of the IMF,” Munevar stated. “It’s one thing for an American to bet his stimulus cheque on cryptocurrency in the hope of big returns, but this is YOLO (you only live once) investing elevated to the national level.”
Bukele goes against his people, imposes BTC
Despite the protests, the data, and the warnings, Bukele is unwavering in his push for BTC. In the latest move, the El Salvador Congress, which his party controls, approved a $150 million trust fund to support his move to make BTC legal tender. This amount could even go higher, local newspaper Diario De Hoy reported.
The money will go towards giving those that download the official national BTC wallet, known as Chivo, the $30 that the president promised them.
In addition, the money will go towards putting up 200 ATMs that President Bukele promised in June, alongside 50 new consulting centers dedicated to the BTC conversion.
The president has continued to defend the Bitcoin Law, insisting that the naysayers will be put to shame come September 7, which is when the law will take effect. “Once in force, people will see the benefits, they [the naysayers] will be left as liars and they will lose double,” he stated in a recent tweet.
Furthermore, he has posted a video that explains what to expect when Bitcoin becomes legal tender in El Salvador.
— Nayib Bukele (@nayibbukele) August 30, 2021
According to a translation of the video, the president doubles down on his not-so-factual argument that “using Bitcoin is not mandatory. You will have the option of paying and collecting in Bitcoin or Dollars.”
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