El Salvador's Bitcoin Future looks grim
Headlines across the globe we're plenty as El Salvador's president Nayib Bukele legalised Bitcoin as tender across the country which made the cryptocurrancy legal tender, meaning shops and traders would have to accept to cryptocurrancy as payment for goods and services. You can read the initial media report Here
However, El Salvador's bitcoin move has not been met with the same excitement from policy and financial experts as users. With many Bitcoin supporters excited at the news and what it will mean for Bitcoin in the future many have condemned the policy position. El Salvador is alleged to be currently exposed to corruption, financial problems and political instability. Many are afraid that this legislation will cause further issues for the nation and on the back of El Salvador's legalisation other South American nations too are "giving the people what they want". Apparently that includes Dodgecoin...
Furthermore Atricle 7 of the legislation brought criticism as it is a move that forces traders to accept bitcoin regardless if they want to or not. The example provided by Nayib was that if a lady was selling flowers or fruit on the side of the road she would be requires to accept bitcoin. A move that Liberals are calling against the basic freedom's of people and markers. You can read more Here
World Bank against El Salvador's decision
El Salvador recently sought support from the world bank to assist its implementation of bitcoin as a legal tender. The move prompted the World Bank to decline the offer based on transparency and environmental concerns surrounding the mining and transaction process being not transparent enough and the requirement of due process to be developed prior to the legalisation as tender. You can read more Here
El Salvador also approached the IMF for support who is not against the legalisation as tender however did provide the commentary that El Salvador suffers a significant amount of macroeconomic issues prior to launch.
With the current situation up in the air it is unlikely El Salvador will meet its target of having Bitcoin a legal tender within 3 months.
Legal Challenge
Not all citizens of El Salvador are welcoming of the Bitcoin legalisation and have sought assistance from the nation's opposition party, Farabundo Marti National Liberation Front (FMNL).
The FMNL has launched a legal dispute stating the move is against the nation's constitution and unlawful. Further adding to the President's issues is a recent study conducted by the Salvadoran Chamber of Commerce and Industry that saw 80% of respondents stating they would NOT accept bitcoin as payment.
A citizen by the name of Oscar Artero stated that the law was designed to "loot peoples pockets" with El Salvador's current political and economic issues which even the United States declaring some of Nayib's policies as corrupt it's still to be seen what the outcome for El Salvador will be. You can read more Here
The court case hasn't received a date for hearing as yet but it will be an interesting development as the days go on.
Given the global pressure that will likely arise and internal disputes around Bitcoin as a legal tender it is anyone's guess if the legislation will remain.
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