“We don’t know”: Salvadorans are annoyed by the impending introduction of Bitcoin

File Photo: War veterans oppose Bitcoin being used as fiat currency in San Salvador, El Salvador, Aug. 27, 2021, protesting for better pensions.Reuters / Jose Cabesus / File Photos

September 1, 2021

Nelson Renteria

San Salvador (Reuters) – At the large handicraft market in the capital of El Salvador, traders need a week for Bitcoin to become a fiat currency, i.e. how Bitcoin works or what advantages it has. He complains that there are no officials to explain what is being brought.

The fear extends beyond the “Excuartel” market of San Salvador to 6.4 million Central American countries, which were the first to introduce Bitcoin as a fiat currency on Tuesday.

“We don’t know the currency. We don’t know where it came from. We don’t know if it will bring us profits or losses, ”said a 42-year-old t-shirt and souvenir seller. Said Claudia Molina. “We don’t know anything.”

“You haven’t trained us. They didn’t tell us what to use and how to make changes. “

At the popular tourist event Excuartel, the government of President Nayib Bukele installed one of the 200 ATMs in Chivo’s digital wallet, which can convert cryptocurrencies into dollars and withdraw them free of charge.

However, around 18 traders and passers-by interviewed by Reuters said that no authorities had explained how Bitcoin works, so most people say they at least don’t use Bitcoin at all. I am.

In July, polls showed that three out of four Salvadorans reserved the Bitcoin program.

On Wednesday around 300 protesters marched to El Salvador’s parliament to demand the abolition of the new Bitcoin law.

“Bukele, I see. You don’t need Bitcoin in El Salvador, ”said a demonstrator’s poster.

Another protester, 29-year-old college student Roxy Hernández, said most Salvadors don’t want to use bitcoin, and even if Bukele says it isn’t mandatory for sellers and consumers, sellers are not required to use bitcoin. I am confused about the law that says payments must be accepted.

“Bitcoin law is arbitrary by the government,” said Roxy in a t-shirt with a logo that rejects Bitcoin.

Bukele defended his initiative by claiming that the use of digital currencies in poor dollar-denominated countries is voluntary and eliminates the fees that Salvadors pay to send money abroad.

More than 2.5 million Salvadorans live overseas, most of whom live in the United States and are returning about $ 6 billion, or 23% of GDP, in 2020.

“The clumsy opposition always plays single move chess. They are all betting to scare the public over the Bitcoin law and maybe they will achieve something, but it will last until September 7th. ”Bukele wrote on his Twitter account last week.

“When it goes into effect, people will understand its benefits. You will show yourself to be a liar, ”he added. “And what if someone doesn’t want to use Bitcoin? Well nothing. Do not download the application and continue your life as usual. “

Bukele’s plan provides a $ 30 bitcoin bonus for those who use the government’s electronic wallet “Chivo” (a local word meaning “good” or “good”).


Critics of Bukele’s plan argue that Bitcoin is risky to use and can be used for money laundering given the volatility of cryptocurrencies. They pointed to El Salvador officials who were accused of corruption by the US State Department.

Steve Hanke, an economist at Johns Hopkins University, said:

Hanke said it was “unthinkable” that the new standard would escape the guidelines of the Financial Action Task Force (FATF), an intergovernmental organization to combat money laundering.

“The last thing El Salvador needs is a report from the FATF,” he said.

Since El Salvador introduced the dollar as a fiat currency in 2001, it has had an average annual inflation rate of only 2%, one of the lowest in Latin America. Critics argue that the record could be jeopardized by the introduction of cryptocurrencies, the value of which fluctuated around $ 2,500 in a matter of hours.

“I like the dollar. We already know, and we know well, so it’s fine. But I don’t know (Bitcoin) so I don’t know how it works, ”he said. Jose Guardado, a 48-year-old farmer who lives in the town of Aguilares in northern San Salvador, said.

The market is skeptical as the World Bank and International Monetary Fund raise environmental and transparency concerns about Bitcoin adoption.

After the Bitcoin law was passed, the rating agency Moody’s downgraded El Salvador’s creditworthiness. The country’s dollar-denominated bonds are under pressure.

“The market tells us that Bukele’s authoritarian tendencies and the idea of ​​blatant cryptocurrencies are leading to currency turmoil and economic collapse,” said Johns Hopkins Hanke. “For the USA this would mean another wave of immigration from failed states in unstable Central America.”

(Report by Nelson Renteria, additional report by Diego Ole in Mexico City, edited by Steve Orlovsky and David Gregorio)

“We don’t know”: Salvadorans are angry about the impending introduction of Bitcoin

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