What Are Pros and Cons of the El Salvador Bitcoin Law?
On June 8, 2021, El Salvador became the first country in the world to make Bitcoin a legal tender. The president of the country, a young politician Nayib Bukele, announced the plans of Bitcoin governmental adoption on June 5, and it took only 3 days to complete the legislation.
There are many things to consider when we try to decide if this move was rather good or bad. There are many critics even among Bitcoin maxis and a lot of people who celebrate the new law as the notable victory in the Bitcoin history of global adoption.
The Republic of El Salvador is a country in Central America. The population is over 6 million. The national El Salvador currency, colón, was replaced with the US dollar in 2001. Now, 20 years later, the new law requires merchants to treat Bitcoin as the USD. Since then the economy of El Salvador started to improve. That's one of the reasons why some experts don't see the Bitcoin law as necessary and even consider it to be risky. More than that, some suspect that the government of El Salvador likes Bitcoin because of the corruption.
Critics especially hate Article 7 of the law. According to it, merchants are forced to accept Bitcoin, they cannot decide. Bitcoin supporters don't like this article because they see Bitcoin as a means of freedom but in El Salvador, it becomes a tool of governmental pressure. Those who don't like Bitcoin hate this article even more because they don't care about the symbolism, they only see that merchants will have to accept a "bad" currency whether they like it or not.
Happily, there is another article. According to Article 12, merchants are not required to accept Bitcoin if they don't have the technical equipment to do that. It means that as of now, a significant percentage of all the country's merchants are free not to accept Bitcoin. It means that Bitcoin adoption is not something that will violently happen in a minute. No, it is going to be a long way. Adoption will spread gradually together with the emergence of technical abilities of local businesses.
The law proponents see Bitcoin law as a benefit because many people (especially those who don't use banks for many reasons) have already been using Bitcoin before it was backed by the officials. It's a rare example of a grassroots movement supported by the government. Let's see what happens next. All in all, we already witness that other countries are planning to follow El Salvador. Paraguay may become the next country to make Bitcoin a legal tender.