- J McGlynn and M Bacina
El Salvador Opposition shake an angry fist at new Bitcoin law
It's not just US Regulators who are divided when it comes to the regulatory treatment of digital assets. A little over a week ago, El Salvador's president, Nayib Bukele made history when his proposal to declare Bitcoin legal tender was approved by El Salvador's Congress. This week, Jamie Guevara, deputy leader of the El Salvador opposition party made a stand to oppose the legislation, teaming up with a group of Salvadoran citizens to file a lawsuit that argues El Salvador’s "Bitcoin Law" is unconstitutional.
As one disgruntled citizen told El Mundo, a Spanish Newspaper:
I bring a lawsuit of unconstitutionality against the decree issued by the Bitcoin Law for being a decree lacking legality, lacking foundation, without considering the significance and harmful effects that such a law will cause to this country.
This perspective contrasts to the Salvadorian President who asserts the Bitcoin laws purpose is to foster financial flexibility and freedom, to: "bring financial inclusion, investment, tourism, innovation and economic development for (their) country".
At the Miami Bitcoin 2021 conference, Bukele portrayed his legislative proposal as a means to “design a country for the future.” He used his twitter account to remark that if just 1% of the world’s bitcoin moved to El Salvador as a result of this new law, it would equate to a quarter of El Salvador's annual economic output.
El Salvador has an unfortunate history of corruption and the government does not enjoy a high level of trust. This is seen in the talk from unimpressed citizens who say that, “The Bitcoin Law is to loot people’s pockets, it is tax-exempt (and) they want to force us to trade.”
Given the law only applies to businesses and not individuals, it remains to be seen how this lawsuit will progress. On the flip side, there are serious issues in forcing businesses to use an electronic transfer system which requires an investment in hardware to facilitate. Credit cards and online payments are voluntary and may be demanded by customers, but legal tender must be accepted by businesses under the Bitcoin Law, meaning businesses will have to find a way to accept Bitcoin.
The question of the 6 billion a year in remittances is thankfully a simpler one, as Bitcoin already provides an inexpensive transfer system for moving value globally.