![]() ![]() ![]() It’s going to take more than a phone app-the executive branch has 90 days to get a huge amount of necessary infrastructure into place. If you wanted to withdraw your tethers as dollars, Mallers posited that you could buy bitcoin with the tethers, then cash the bitcoin out at any bitcoin ATM! At the time, there were two bitcoin ATMs in the country, a few kilometers apart in the coastal resort villages of El Sunzal and El Zonte no more have been installed as yet.Įl Salvador runs on physical cash 70 percent of the adult population don’t even have a bank account. At the end of all this, the recipient would get a dubious alleged crypto dollar in their Strike app, rather than the genuine dollar notes they would normally withdraw. dollars from the sender, buy bitcoins, transmit those to El Salvador, and convert them to tethers-a dollar-substitute crypto token supposedly backed one-to-one by actual dollars, though seemingly nobody in finance can find the evidence that should exist to back this. Strike CEO Jack Mallers outlined in January how Strike will do remittances to El Salvador: He will take U.S. payments company Zap, that claims to do remittances using bitcoin. The bitcoin scheme is being run in partnership with Strike, a unit of U.S. That’s the money that the government-and its bitcoin partners-are after. ![]() After fees, these dollars go to the recipients. 7, 90 days after being passed.Ī quarter of Salvadoran citizens live in the United States, and send money home remittances were over $5.6 billion in 2019, on the level of El Salvador’s total export income. The executive branch will build the infrastructure for bitcoin payments in fact, Article 15 of the law says that any provision of a previous law that would regulate bitcoin is repealed-an all-encompassing enabling act, as long as bitcoin is involved. dollars bitcoin is just a dollar substitute. (In practice, that’s a loophole large enough to drive a truck through bitcoin is functionally useless as a payments system.) Accounts will still be kept in U.S. Merchants must accept bitcoin for goods and services, unless they are technologically unable to. Nobody had seen the law except the president and perhaps the minister of the economy, Maria Luisa Hayem, before it was proposed at 8pm on June 8 Parliament discussed it for a few hours, and it was rammed through with Bukele’s massive parliamentary majority.īitcoin will be legal tender for all debts, including tax. The Bitcoin Law passed 62–19, with three abstentions, just after midnight local time, early June 9. Bitcoin has utterly failed to be useful as currency-except for ransomware payments-so the promotional line is now that it’s a “store of value.” That is quite a claim for a speculative commodity given to spectacular asset bubbles, whose price can go up and down 50 percent within a couple of months. It’s also typical of Bitcoin fantasies a project completely unsuited to daily life in El Salvador, set up largely to boost the image of the cryptocurrency itself.īitcoin is the first cryptocurrency, originally created to be a form of money outside government control. This is likely to be a disaster for the country-but it’s typical of Bukele’s erratic style of government. ![]() dollar, the country’s currency since 2001. In a video played at the Bitcoin Miami conference in Florida on June 5, Bukele announced a major economic policy change: El Salvador would be adopting bitcoin as an official currency, running in parallel with the U.S. Nayib Bukele, the president of El Salvador, is young, dynamic, and impulsive. ![]()
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