Bitcoin (BTC)’s big day is upon us: A sovereign state has officially adopted it as legal tender, a once-almost unthinkable move for a decentralized, internet-based token. The move was conceived by Nayib Bukele, El Salvador President. However, controversy has already arisen. Some argue that the clause in the new law that requires businesses to accept BTC payment as a form for payment if requested, is an example “strong-arm tactics”.
In a bid to drive up the pace of adoption – and possibly begin the process of decoupling from the United States dollar – the new law, which came into force earlier today specifies in Article 7 that companies have no choice in the matter. It would appear that they are not at liberty to deny customers the right to pay in Bitcoin.
Multiple surveys by various bodies across the country have revealed that most citizens are against the law, don’t understand BTC, and would rather not own it.
However, Bukele’s popularity has remained high so far. Reports of popular opposition to adoption were dismissed by the President as “FUD”. Street protests against law enforcement have continued, but most of them appear to have been organized by left-wing groups opposing Bukele and his right wing Nuevas Ideas party.
Domestic media is strongly opposed to BTC adoption, and Bukele’s rule in general. El Diario de Hoy is the nation’s largest newspaper and pointed out several “contradictions” in Article 7. He claimed that even the law’s language was unclear.
It reported that Article 7 “establishes the obligation to accept bitcoin,” but “does not specify any penalties” for those who refuse to accept it.
The government and Nuevas Ideas also have mixed messaging regarding whether BTC use should be “voluntary or mandatory.” There are many examples of ministers and MPs making contradictory statements about the subject.
Javier Argueta (legal advisor to the president) stated that companies that refuse to pay BTC payments could face consumer law-related penalties. He added that it was mandatory for companies to have BTC wallets. Any firm with a wallet is legally obliged to accept the token.
This kind of statement appears to have alienated some international observers, with journalist Naomi Brockwell writing:
“I love bitcoin. “But I will not cheer a monetary scheme that is enforced by [the] threat or violence.”
The government has perhaps been more sensitive to such comments and hopes to attract bitcoiners with a more flexible approach. Argueta later appeared on Radio YSKL, where he said in an interview:
“I don’t think it will be mandatory for companies. It will be an additional [payment] option for those companies.”
The adoption of Cryptoverse is the main issue
Nic Carter, a Partner inCastle Island VenturesHe was a former cheerleader for El Salvador BTC adoption plans in recent months and was more cautious with his response.ClaimOn Twitter, bitcoiners can “can celebrate” BTC law “without resorting to strong-arm tactics to impose them.”
“I continue to consider Article 7 en la #LeyBitcoin unnecessary and I urge the Salvadorian leadership to reconsider it. He stated that a Bitcoin standard coercively imposed would not be sustainable.
Others rushed to point out legal wrinkles to such articles, with one commenter on the same feed remarking: “Forced to accept? This is legal tender by definition! “Why are we making things out of nothing?”
Some were less certain. Peter St Onge, an economist, ofFeng Chia University PoseA conundrum.
Article 7 is, in itself, coercive. It is not clear whether Article 7 is more coercive or less than fiat.
Velas CommerceHannah Rosenberg, the editor of The Guardian, agreed with Hannah Rosenberg. She said Article 7 was “not okay” but added that it was true for all legal tender laws.
Brockwell, meanwhile, dismissed defenders of the Bukele stance as “coercion apologists.”
Reddit user claimed to be in El Salvador and accused Bukele, “just a Trump-wannabe who uses people’s ignorance for staying popular.”
A poster replied:
“Crypto should be about giving people more choices, not forcing them to use it.” “Top down adoption is rarely successful.”
The Executive Director ofHuman Rights WatchJose Miguel Vivanco in the meantimesaidThat Bukele – some people haveClaimIs now “taking pages from the dictator’s handbook” and is “dismantling democracy institutions faster than Hugo Chavez during his reign in Venezuela.”
Vivanco made a series of parallels between Chavez, Bukele. Vivanco pointed out that both leaders had seized control over their national Supreme Courts and sought to amend the constitution so they could serve longer terms. He also said that scores of lower court judges had been removed in an attempt to take control of the judiciary.
American officials echoed his thoughts. The LA Times reported that Jean Manes, the top United States official in El Salvador, had stated that El Salvador was “a democracy in decline” and also compared Bukele to Chavez.
The international media responded to the promulgation with skepticism, with the Financial Times calling the move a “dangerous gamble.” The media outlet speculated, in an editorial piece:
“The bitcoin gambit could also be a stalking horse to a longer-term strategy to replace the United States Dollar with a local stablecoin.
Comment withCryptonews.com, Dermot O’Riordan, a Partner at Eden BlockAccording to a statement by, bitcoin is “probably not an optimal cryptocurrency for El Salvador’s government,” but that it had “most definitely” “pierced financial veil.”
Bukele’s greatest desire is, however, for tech innovators from Asia and the West to move to El Salvador.
He may also be hoping that post-COVID 19 BTC-keen tourists will follow him. There are signs that he may just be able to get what he wants, according to some.
Sidney Powell, CEO and Co-FounderMaple FinanceIt was stated:
Tourism is one of the most immediate and greatest benefits of this policy. It is costly and difficult to send USD internationally via wire. Convert USD to BTC in yourCoinbaseIt is easy to send money to friends and family by opening an account.
Powell continued by stating that the tourism sector has the potential to be the most beneficial for the country.
“The ability to avoid paying a fee of 5%-10%Western UnionThis will be a major win for both tourists and businesses. It’s almost as if the entire tourism industry has become 10% more affordable and competitive.
Tourism is a major source of income in El Salvador – accounting for over 11% of GDP, per Knoema. In 2019, tourists visiting El Salvador spent an average of USD 552 per head during their stay.
In Bitcoin Beach, a community in El Salvador’s surfing hotspot of El Zonte, BTC adoption has gone down a treat with visitors. Many believe that this is the (so far successful) project that turned Bukele’s head to BTC.
he Rubicon was crossed, no matter what the President’s true motivations.
Antoni Trenchev is Co-Founder and Managing Partners ofNexoThe following was the conclusion:
“Michael Saylor put institutional adoption on the map and now El Salvador is putting sovereign adoption there, too. Bitcoin is growing in strength, no matter what your perspective.
BTC was trading at USD 50.992 at 12:55 UTC. It was down less than 1% per day and its weekly gains were reduced to nearly 8%