A 2001 law on monetary integration in the country states that salaries and fees may only be paid in colónes or dollars.
Remittance firms hesitant to support BTC despite legal tender law in El Salvador
Remittance firms operating in El Salvador appear reluctant to support Bitcoin despite the country’s new law mandating the crypto asset as legal tender.
Adopting the Bitcoin standard? El Salvador writes itself into history books
El Salvador has become the first country to make Bitcoin legal tender, but what are the complexities and potential short-term effects?
El Salvador’s Bitcoin adoption may jeopardize IMF negotiations: JPMorgan
JP Morgan says that El Salvador’s decision to adopt Bitcoin as legal tender is of little economic benefit.
El Salvador’s Bitcoin adoption an ‘interesting experiment,’ says BIS exec
El Salvador’s move to make Bitcoin legal tender in the country continues to elicit reactions from legacy finance gatekeepers — this time, from the Bank for International Settlements.
IMF plans to meet with El Salvador’s president, potentially discussing move to adopt Bitcoin
The International Monetary Fund has previously spoken out against smaller nations like the Marshall Islands recognizing a digital currency as legal tender.
New report: El Salvador Bitcoin pump failed to attract smart money, for now
Bitcoin market sentiments remain skewed to the downside even after it becomes a legal tender in El Salvador following a parliamentary nod.
El Salvador’s president wants to build volcano-powered crypto miners
Bitcoin is heating up — some may say erupting — as the Latin American country plans to tap energy from volcanoes for mining the cryptocurrency.
Bitcoin miner Poolin immortalizes El Salvador’s BTC adoption on the blockchain
El Salvador accepting Bitcoin as legal tender is now forever etched on the blockchain as mining pool Poolin adds a newspaper headline to block 686,938.
Top Economist Calls Bitcoin As Legal Tender “Stupid”. Here’s Why He’s Wrong.
Let’s not kid ourselves, a person like Steve Hanke has enormous incentives to defend the status quo. He’s benefited tremendously from it. It could be argued that his livelihood depends on Bitcoin failing. A project to make it legal tender in any country goes directly against Hanke’s interests, and it’s no wonder he spoke against it. The insult was over the line, though.
We´re going to take the higher road and elegantly answer all of his points. The tweet in question was this one:
#Paraguay congressman Carlitos Rejala seeks to make #BTC legal tender. How stupid can you be? #Bitcoin is NOT a store of value, medium of exchange, or a reliable unit of account. Its volatility is an obvious reminder that it is merely a highly speculative asset, NOT a currency. https://t.co/BZXA9Y9i3N
— Steve Hanke (@steve_hanke) June 7, 2021
Is Bitcoin A Store Of Value?
Who decides this? The people. If one person uses an asset to safeguard his wealth, then it’s a store of value. The question then is, is Bitcoin an effective store of value? Well, considering it’s the only commodity in the history of the earth that presents absolute scarcity, it’s probably a safe bet. Make no mistake, though, it’s still a bet. The Bitcoin experiment is an ongoing process and nothing is set in stone.
Related Reading | Why Bitcoin Declared Legal Tender Could Have Major Implications Beyond El Salvador
Scratch that, one thing is set in stone. There will only ever be 21 million bitcoins. The supply is fixed, so if the demand increases, the price will go up. It’s as simple as that. To add credibility to the argument, let’s quote Saifedean Ammous’ “The Bitcoin Standard”:
Until Bitcoin’s invention, all forms of money were unlimited in their quantity and thus imperfect in their ability to store value across time. Bitcoin’s immutable monetary supply makes it the best medium to store the value produced from the limited human time, thus making it arguably the best store of value humanity has ever invented. To put it differently, Bitcoin is the cheapest way to buy the future, because Bitcoin is the only medium guaranteed to not be debased, no matter how much its value rises.
Did you know that 40% of all US Dollars that have ever existed were printed in the last twelve months? That’s what debasement looks like. And the whole world is feeling its effects.
Is Bitcoin A Medium Of Exchange?
Our friend Steve Hanke was answering Paraguay’s congressman Carlos Rejala but, as you probably know, the first country to approve bitcoin as legal tender was El Salvador. This is not a coincidence, since “a real village with real Bitcoin uses in daily life” is right there in El Salvador.
The Bitcoin Beach project is also the main real-life use case for the Lightning Network. If there’s a place in which small Bitcoin transactions are an everyday thing, it’s this one. As Nasdaq informed last year, when the project was still developing:
In the flagship Bitcoin village of El Zonte, for example, you can use bitcoin to pay for a haircut, get your nails done and chow down on some local dishes (like some delicious pupusas). Soon, you’ll even be able to buy a cup of coffee with it and go to the doctor’s office for a checkup.
If there’s any doubt that Bitcoin Beach was the inspiration for El Salvador’s historic move, Stephan Livera paraphrases what President Bukele said on Clubhouse:
Bukele: Bitcoin beach team demonstrated that this is not for rich people only. A community can benefit from Bitcoin. And now we’re going to demonstrate it on a country wide scale.
— Stephan Livera (@stephanlivera) June 9, 2021
So yeah, Bitcoin is a proven medium of exchange with real-life use cases. We could include the incredible amount of Bitcoin transactions that the virtual world sees every day, but there’s no need.
BTC price chart on Bitbay | Source: BTC/USD on TradingView.com
Is Bitcoin A Reliable Unit Of Account?
Let’s admit it, Bitcoin’s price is volatile. Why is that? Let’s quote “The Bitcoin Standard” once again:
As it stands, given that Bitcoin constitutes less than 1% of the global money supply, large individual transactions in Bitcoin can have a large impact on price, and small variations in demand can cause large swings in price. This, however, is a feature of the current situation where Bitcoin as a global settlement network and currency is still a tiny fraction of global settlement payments and money supply.
Bitcoin is still in its infancy. You can’t ask a 12-year-old child to behave like an adult. What does it need to grow? Nurture. And since it IS a currency, nurture is equivalent to widespread adoption. This is exactly what’s happening, with all of these countries considering emulating El Salvador in making Bitcoin legal tender.
Related Reading | Time To Pay Attention: Bitcoin Indicator Behavior Mimics Historic Rally
If Bitcoin becomes the global reserve currency of the world, volatility won’t be a problem. And the whole planet will be a level playing field because one country won’t have the immense privilege of issuing the global reserve currency. And debasing it at will.
Mexico lawmakers aim to follow the example of neighboring countries with proposed Bitcoin legislation
“We are going to lead the shift to crypto and fintech in Mexico,” said one senator.
Latin lawmakers don lazer eyes on Twitter in support of Bitcoin
An increasing number of Latin American lawmakers are donning Lazer eyes on their Twitter avatars to express their support for Bitcoin and digital assets.
Bitcoin users will get help relocating and working in El Salvador: President
Nayib Bukele says he wants to help entrepreneurs embrace El Salvador as a base, with Bitcoin free from capital gains tax.
BTC price doesn’t care about El Salvador? 5 things to watch in Bitcoin this week
News of a major adoption move has no impact on lackluster BTC price action prior to government approval — can anything lift Bitcoin out of its range?