El Salvador on Tuesday became the first country in the world to declare bitcoin legal tender, a controversial plan by the popular president. nb bukele It started with the collapse of the system due to strong demand and generated strong volatility in the price of the cryptocurrency.
Bukele’s controversial plan, which generated great opposition, calls for Salvadorians to use bitcoin, the equivalent of the dollar, the official currency two decades ago, to pay for any good or service.
An application on cell phones, “Chivo Wallet”, acts like an electronic wallet for buying or selling with bitcoin, and was set up to convert 200 ATMs across the country to cash.
its operation in doubt
As the new currency was unveiled, the system failed for several hours, and people crowded around an ATM in the historic center of San Salvador.
“We do not measure things for a day, we measure things over time. It is a journey, not a destination (…) brock pierce, visiting the country for the occasion.
A well-known fan of Bukele’s plan, Pierce financed a show Tuesday night with 150 drones that designed various symbols in the sky, including bitcoin, on El Sunjal beach.
Meanwhile, hundreds of people demonstrated against the digital currency around the Legislative Assembly and tires were burnt while being watched by riot police.
“I distrust bitcoin for three reasons: it is very volatile money, it lends itself to money laundering and we could become a narco-state,” he said. louis mejillone, 28 year old resident.
The government assures that this measure will contribute to the banking of the population and avoid the loss of about $400 million in commissions for remittances sent from abroad through financial institutions.
The Bukele government has budgeted $203 million for its plan, which supports the automatic convertibility of bitcoin into dollars and at the request of the owner.
For the authorities, the cryptocurrency would stimulate the stable economy since 2001. But economists and organizations such as the World Bank, IMF and IDB are skeptical about adopting that currency as legal currency due to its high volatility.