‘We Don’t Know’: Salvadorians Worried About Looming Bitcoin Adoption | The powerful 790 KFGO

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By Nelson Renteria

SAN SALVADOR (Reuters) In the Salvadoran capital’s main craft market, traders complain that a week before bitcoin becomes legal tender, no official has come to explain how it will work or what benefits that could bring.

The sense of unease extends beyond San Salvador’s Excuartel market to the Central American country of 6.4 million people which will become the first country in the world to adopt bitcoin as legal tender on Tuesday.

We don’t know the currency. We don’t know where it comes from. We don’t know if it’s going to make us a profit or a loss, said Claudia Molina, a 42-year-old T-shirt and souvenir seller. We don’t know anything.

They didn’t give us any training. They didn’t tell us what they were going to use or how to make the change.

At Excuartel, a popular tourist site, the government of President Nayib Bukeles has installed one of 200 ATMs in its Chivo digital wallet that will convert cryptocurrency into dollars and withdraw it without commission.

But some 18 traders and passers-by polled by Reuters said no authority has explained how bitcoin works, so most say they won’t use it, at least to begin with.

In July, three in four Salvadorans had reservations about bitcoin, according to a public opinion poll.

About 300 protesters marched in front of Salvadoran Congress on Wednesday to demand the repeal of the new bitcoin law.

Bukele, understand that in El Salvador we don’t want bitcoin, said a sign carried by a protester.

Another protester, Roxy Hernndez, a 29-year-old student, said most Salvadorans do not want to use bitcoin and are confused by the law, which states that sellers must accept bitcoin payments, although Bukele said that it was not mandatory for sellers or consumers.

The bitcoin law is something arbitrary on the part of the government, said Roxy, wearing a t-shirt with a logo that rejects bitcoin.

Bukele defended his initiative by insisting that the use of digital currency will be optional in the impoverished, dollarized country, and that it will eliminate the commissions Salvadorians pay abroad to send funds home.

Over 2.5 million Salvadorans live abroad, the vast majority in the United States and in 2020 they returned nearly $ 6 billion, or 23% of the country’s gross domestic product.

The awkward opposition always plays chess in one fell swoop. They have gone all out to scare the public about the Bitcoin law and maybe they will succeed, but only until September 7, Bukele wrote on his Twitter account last week.

Once it’s in effect, people will see the benefits; they will be presented as liars, he added. And what if someone doesn’t want to use bitcoin? Well, nothing. Do not download the app and go about your life normally.

The Bukeles plan includes a $ 30 equivalent bitcoin bonus for those using the Chivo government’s e-wallet, a local word for something good or kind.

CONCERN

Critics of the Bukeles plan argue that using bitcoin is risky given the volatility of cryptocurrencies and because it could be used to launder money. They singled out Salvadoran officials whom the US State Department accused of corruption.

(The) bitcoin law promises many surprises, unintended consequences and costs that have not been taken into account, said Steve Hanke, an economist at Johns Hopkins University.

Hanke said it was inconceivable that the new standard could escape the guidelines set out by the Financial Action Task Force (FATF), an intergovernmental institution that combats money laundering.

The last thing El Salvador needs is a report by the FATF, he said.

Since El Salvador adopted the dollar as legal tender in 2001, average annual inflation has been only 2%, one of the lowest in Latin America. This record, critics say, could be compromised by the introduction of a cryptocurrency that fluctuated in value by $ 2,500 in a matter of hours.

I prefer the dollar because we already know it and know it well, there is no problem. But since we don’t know (bitcoin), we don’t know how it will work, said Jose Guardado, a 48-year-old farmer from the municipality of Aguilares, north of San Salvador.

The World Bank and the International Monetary Fund have raised environmental and transparency issues surrounding bitcoin adoption, and markets are skeptical.

After the approval of the bitcoin laws, the rating agency Moodys lowered El Salvador’s creditworthiness. The country’s dollar-denominated bonds are under pressure.

The markets are telling us that Bukeles’ authoritarian tendencies and crazy cryptocurrency ideas will lead to monetary chaos and economic collapse, Hanke said at Johns Hopkins. For the United States, that would mean a new wave of migrants from an unstable failed Central American state.

(Reporting by Nelson Renteria; Additional reporting by Diego Ore in Mexico; Editing by Steve Orlofsky and David Gregorio)

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