El Salvador’s Bitcoin law was first published last weekend during the Bitcoin Miami 2021 conference. It suggests regulating Bitcoin as legal tender and therefore integrating it into the country’s official currency, the US dollar.
Yesterday the bill was submitted to Congress for approval. Anthony Pompliano called it a “historic day for humanity”. The latest reports suggest that the bill has now been approved. However, doubts remain about both the bill itself and El Salvador’s suitability as a Bitcoin hub.
President Bukele sees Bitcoin as a path to economic prosperity
President Nayib Bukele surprised the world on Saturday when he announced plans to make Bitcoin legal tender in the Central American nation.
He spoke about the benefits of helping migrants living abroad send remittances home. And also how this could improve the lives of millions by bringing economic growth and financial inclusion to the country.
“In the short term, this will create jobs and help bring financial inclusion to thousands outside of the formal economy.”
The move has sparked a flood from neighboring Latin American countries to signal their intention to follow suit. So far, the list of countries that could mimic El Salvador includes Brazil, Paraguay, Panama, and Mexico.
Skeptics sharpen their knives
According to CNBC, El Salvador is the first country to officially adopt Bitcoin as legal tender. The legislature voted for the law with an “overwhelming majority”. However, the bill has yet to go through the legislative process before it comes into force.
Nevertheless, several legislators raised objections to the draft law during the discussions. Including Congressman Reyes, who spoke about the lack of discussion on the issue, the bill with just 16 articles, the price volatility and the risky nature of the proposal.
Goldbug Peter Schiff took the opportunity to continue his anti-Bitcoin rhetoric. He said the leading cryptocurrency would never be used as a payment method or in relation to financial accounting. On top of that, the whole thing was a setup to lure Bitcoin companies to El Salvador.
“It’s not an event. #Bitcoin never be used as a medium of exchange or a unit of account. The sole purpose of the symbolic gesture is to get Bitcoin companies to start businesses, pay taxes, and create some jobs while allowing Bitcoin pumpers to exaggerate the meaning. “
As much as President Bukele has welcomed cryptocurrency investors and entrepreneurs, doubts remain about the country’s security.
UK Foreign Office travel advice notes that while El Salvador is relatively “trouble free”, it has one of the highest crime rates in Latin America. Issues with ongoing political tensions in the country and a recent motion to remove judges from the constituent chamber were also raised.
“On May 1, motions from the Legislative Assembly to remove the judges who sit in the Constitutional Chamber of the country’s Supreme Court and the Attorney General led to calls for protests.”
Source: BTCUSD on TradingView.com