Salvadorans took to the streets on Friday (27) and protested against the adoption of Bitcoin as a legal tender. Several workers, war veterans and retirees expressed concerns about the use of cryptocurrency.
The new law puts Bitcoin on a peg to the US dollar, a move that has been criticized by the International Monetary Fund (IMF).
Hundreds of protesters marched through the capital San Salvador to express their concerns about the use of the cryptocurrency. Protesters held up signs saying “Bukele, we don’t want bitcoin” and “No for money laundering”.
Salvadoran army and guerrilla veterans march in protest against Bitcoin.
Salvadoran army and guerrilla veterans march in protest against the economic measures adopted by the government in San Salvador on August 27, 2021. (Photo by MARVIN RECINOS / AFP)
Bitcoin in El Salvador
El Salvador’s lawmakers voted to adopt Bitcoin as their legal currency in June, with the law going into effect on 7 September.
El Salvador’s President Nayib Bukele praised the adoption of Bitcoin as a way to facilitate the payment of remittances from people living abroad.
However, the use of cryptocurrency as a currency has been criticized by the IMF for its volatility and lack of relationship with the real economy.
Stanley Quinteros, a member of the Supreme Court workers’ union, said they are concerned about the currency’s drastic volatility, with its value shifting “uncontrollably from one second to the next.”
“We know this currency fluctuates dramatically. Its value changes from one second to the next and we have no control over it”, Stanley Quinteros, a member of the Supreme Court workers’ union, told Reuters.
El Salvador’s neighboring countries are waiting to see the adoption of Bitcoin as a legal currency that can reduce the cost of remittances, an important source of income for millions.
Dante Mossi, the executive president of the Central American Bank for Economic Integration (CABEI), identified Guatemala, Honduras and El Salvador as the countries that would benefit most if adopting Bitcoin reduced the cost of sending remittances.
He added that if it goes well for El Salvador, other countries will likely seek its adoption as well.
Mossi dubbed the plan an “out-of-this-world experience” to increase financial inclusion in a region where people don’t have bank accounts or credit cards and depend on remittances from relatives living in the United States.