El Salvador’s Bitcoin law and why it may not be a happy half-birthday
A number of crypto-investors, analysts, and even several governments thought that El Salvador would lead the international community in the mass adoption of Bitcoin. However, reactions have been mixed since the flagship coin was first recognized as legal tender six months ago.
Happy half-birthday, Bitcoin Law!
The Blockchain LatAm Report 2022 by Sherlock Communications had a lot to say about El Salvador and its position as a crypto hub.
One point of note was the country’s highly controversial Volcano Bonds proposal, which has been delayed by the country’s administration. In fact, Finance Minister Alejandro Zelaya claimed market conditions need to be better to issue the bonds. However, some economists are speculating that El Salvador, which reportedly bought around 1,800 Bitcoin, is reeling under the losses from multiple market crashes.
For reference, Bitcoin was worth over $52,000 on 6 September, a day before the Bitcoin Law came into force. President Nayib Bukele bought several dips after that as Bitcoin rose to an all-time high of around $67,500.
At press time, however, Bitcoin was trading at $44,612.
Another problem is that Chivo’s adoption may have been more glitchy than initially reported. The Sherlock Communications report noted,
“The NGO Cristosal Human Rights received around 1,200 complaints, the majority of them having to do with user’s credentials being used by someone else without their consent to make or use Chivo accounts.”
The report added,
“To solve these issues, software developer AlphaPoint was hired to work on Chivo and improve it.”
And, that’s not all. While Binance CEO Changpeng Zhao’s meeting with President Nayib Bukele should have been a bullish sign for Bitcoin adoption, mainstream media companies reported that El Salvador is seeking help from the exchange giant to improve Bitcoin’s uptake. This, again, may be a sign that all is not well.
At the same time, there have been positive signs six months on. While Bitcoin might be floundering, Sherlock Communications observed that El Salvador has caught the eye of tourists, crypto entrepreneurs, miners, and even crypto conference organizers.
Time to get billed
President Nayib Bukele has been quick to express his outrage after he learned about a proposed bill in the USA “to require reports on the adoption of a cryptocurrency as legal tender in El Salvador.”
The bill stresses on tracking the adoption of crypto in El Salvador in order to make sure sanctions are being followed. It also works towards making sure there is no risk to the USA’s own financial system.
Going forward, it seems likely that there will be more investigation into El Salvador’s tryst with the king coin.
Never in my wildest dreams would I have thought that the US Government would be afraid of what we are doing here. pic.twitter.com/QgJPa70mn0
— Nayib Bukele (@nayibbukele) March 23, 2022