A week before El Salvador introduces Bitcoin as its legal currency, small groups of protesters took to the streets. Protests against the Bitcoin law are growing in frequency before it goes into effect on September 7th.
A week before El Salvador introduces Bitcoin as its legal currency, small groups of protesters took to the streets. According to Business Insider, protests against the Bitcoin law and President Nayib Bukele are mounting before it goes into effect on September 7th.
The protesters’ reasons against the introduction of Bitcoin range from simple political opposition to President Bukele to concerns about price volatility in US dollars and misunderstandings about the new law.
The passage of the law will be revolutionary and has the potential to free El Salvador from the United States’ relentless money printing. At the very least, Bitcoin will give El Salvadorans one more way to make and store their fortunes, and perhaps more importantly, Bitcoin will give citizens a new way to receive payments and transfers with no commission.
Local San Salvador media sources said protesters believe Bitcoin will pose a serious threat to El Salvador’s economy, Business Insider reported. One argument is that the El Salvador government cannot control the devaluation of their dollar, on which they are currently totally dependent, but neither will it be able to control a Bitcoin economy.
Given the continued abuse and theft of people’s money and time by fiat currencies issued and discounted by all governments, it is worth noting that it is net for the people of El Salvador that the government cannot control Bitcoin.
The oft-quoted argument that Bitcoin is volatile is only valid when compared to an asset like the chronically bloating US dollar. Bitcoin itself has a terminal supply cap.
The other pertinent argument against the introduction of Bitcoin in El Salvador is that it encourages corruption in the form of money laundering and hidden transactions, but this is a complete misunderstanding of how Bitcoin works. In contrast to US dollars, every transaction on the Bitcoin ledger is publicly accessible and traceable at any time.
Although the arguments against the introduction of Bitcoin in El Salvador are pretty weak, it remains to be seen what will happen. The financial world will be watching El Salvador’s Bitcoin experiment in the weeks following September 7th. The protesters retain the right to choose whether and to what extent they use Bitcoin.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.