{"id":73535,"date":"2021-09-07T07:25:44","date_gmt":"2021-09-07T04:25:44","guid":{"rendered":"https:\/\/www.capitalfm.co.ke\/business\/?p=73535"},"modified":"2021-09-07T08:56:48","modified_gmt":"2021-09-07T05:56:48","slug":"in-world-first-bitcoin-becomes-legal-tender-in-el-salvador","status":"publish","type":"post","link":"https:\/\/www.capitalfm.co.ke\/business\/2021\/09\/in-world-first-bitcoin-becomes-legal-tender-in-el-salvador\/","title":{"rendered":"In world first, bitcoin becomes legal tender in El Salvador"},"content":{"rendered":"<p><strong><span class=\"city\">San Salvador<\/span>,\u00a0<span class=\"country\">El Salvador. Sept 7 &#8211; <\/span>El Salvador on Tuesday becomes the first country in the world to accept bitcoin as legal tender, despite widespread domestic skepticism and international warnings\u00a0of risks for consumers.<\/strong><\/p>\n<p>President Nayib Bukele&#8217;s government claims the move will give many Salvadorans access to bank services for the first time and save some $400 million in fees on remittances sent home from abroad every year.<\/p>\n<p>&#8220;Tomorrow, for the first time in history, all the eyes of the world will be on El Salvador. #Bitcoin did this,&#8221; Bukele said on Twitter Monday.<\/p>\n<p>He started the ball rolling Monday evening by announcing El Salvador had bought its first 400 bitcoins, in two tranches of 200, and promised more were coming.<\/p>\n<p>The 400 bitcoins were trading at around $21 million, according to the cryptocurrency exchange app Gemini.<\/p>\n<p>Recent opinion polls showed a majority of El Salvador&#8217;s 6.5 million people reject the idea and will continue using the US dollar, the country&#8217;s legal currency for the last 20 years.<\/p>\n<p>&#8220;This bitcoin is a currency that does not exist, a currency that will not benefit the poor but the rich,&#8221; said skeptic Jose Santos Melara, who took part in a protest by several hundred people in the capital San Salvador last week.<\/p>\n<p>&#8220;How will a poor person invest (in bitcoin) if they barely have enough to eat?&#8221;<\/p>\n<p>In June, El Salvador&#8217;s parliament approved a law to allow the crypto money to be accepted as tender for all goods and services in the small Central American nation, along with the US dollar.<\/p>\n<p>The bill, an initiative of Bukele, was approved within 24 hours of being presented to Congress &#8212; where the president&#8217;s allies have held a majority since March.<\/p>\n<p>Experts and regulators have highlighted concerns about the cryptocurrency&#8217;s notorious volatility and the lack of any protections for its users.<\/p>\n<p>&nbsp;<\/p>\n<h2>&#8211; Skepticism &#8211;<\/h2>\n<p>&nbsp;<\/p>\n<p>The government is installing more than 200 bitcoin teller machines, some guarded by soldiers to prevent possible arson by opponents.<\/p>\n<p>And Bukele has promised $30 for each citizen who adopts the currency.<\/p>\n<p>&#8220;These are decisions the administration and lawmakers have taken without consulting&#8221; the population, said Laura Andrade, director of the Public Opinion Institute of the Central American University, which found in a poll that 70 percent of Salvadorans opposed the move.<\/p>\n<p>&#8220;We see that people do not perceive a positive impact to significantly transform their living conditions,&#8221; she told AFP.<\/p>\n<p>Nearly two-thirds of Salvadorans questioned for the poll said they had no interest in downloading the &#8220;Chivo&#8221; electronic wallet that will allow users to buy and spend bitcoin.<\/p>\n<p>Oscar Cabrera, an economist at the University of El Salvador, said the currency&#8217;s high volatility will have a &#8220;negative impact&#8221; on consumers, affecting the price of goods and services.<\/p>\n<p>The currency fell beneath $30,000 in June, less than half its all-time high of more than $64,000 just two months earlier.<\/p>\n<p>For its part, the Salvadoran Foundation for Economic and Social Development (FUSADE) said it was &#8220;unconstitutional&#8221; to make it compulsory for merchants to accept bitcoin as a form of payment.<\/p>\n<p>&nbsp;<\/p>\n<h2>&#8211; &#8216;Malign actors&#8217; &#8211;<\/h2>\n<p>&nbsp;<\/p>\n<p>Bukele, who is popular but under fire in several quarters for moves to tighten his grip on power, has accused opponents of seeking to &#8220;sow fear&#8221; among Salvadorans, few of whom have access to formal banking services.<\/p>\n<p>Remittances account for more than a fifth of GDP in the dollarized economy, mainly sent in dollars via agencies such as Western Union by an estimated 1.5 million expats.<\/p>\n<p>According to World Bank data, El Salvador received more than $5.9 billion in 2020 from nationals living abroad, mainly in the United States.<\/p>\n<p>And the country is relying on this money to boost a struggling economy that contracted 7.9 percent in 2020 due in large part to the coronavirus pandemic.<\/p>\n<p>Economists and international bodies such as the World Bank, International Monetary Fund and Inter-American Development Bank have expressed concerns about El Salvador&#8217;s bitcoin adoption.<\/p>\n<p>The United States has urged El Salvador to ensure a &#8220;regulated,&#8221; &#8220;transparent&#8221; and &#8220;responsible&#8221; use of bitcoin, and to protect itself from &#8220;malign actors&#8221; such as hackers seeking ransom money.<\/p>\n<p>Bitcoin is criticized by regulators for its potential for illegal use &#8212; notably in laundering money from criminal activities and financing terrorism.<\/p>\n<p>But not everyone is against it, and according to Bukele in late June, some 50,000 Salvadorans were using bitcoin.<\/p>\n<p>Many of them are\u00a0in the coastal town of El Zonte, where hundreds of businesses and individuals use the currency for everything from paying utilities bills to buying a can of soda.<\/p>\n<p>Started as a project by an anonymous bitcoin donor, the town until recently boasted El Salvador&#8217;s only bitcoin teller machine.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>San Salvador,\u00a0El Salvador. Sept 7 &#8211; El Salvador on Tuesday becomes the first country in the world to accept bitcoin as legal tender, despite widespread domestic skepticism and international warnings\u00a0of risks for consumers. President Nayib Bukele&#8217;s government claims the move will give many Salvadorans access to bank services for the first time and save some [&hellip;]<\/p>\n","protected":false},"author":12327,"featured_media":72102,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[1075,1074,1073],"coauthors":[],"class_list":["post-73535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world","tag-bitcoin","tag-bitcoin-legal-tender","tag-el-salvador"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.7.1 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>In world first, bitcoin becomes legal tender in El Salvador - Capital Business<\/title>\n<meta name=\"description\" content=\"San Salvador,\u00a0El Salvador. 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