El Salvador’s Bitcoin law, passed in June, will become effective by Tuesday, September 7. With only a few hours until Tuesday, the controversies surrounding the law have refused to simmer. The latest concerns an article (Article 7) in the law that makes Bitcoin adoption by merchants mandatory and provides for sanctions in the event of contravention. Javier Argueta, legal advisor to president Nayib Bukele seems to agree with this provision and reiterated it during an interview.
Sanctions will also be extended to merchants who refuse to utilize the country’s new Bitcoin wallet entitled ‘Chivo’ under the Consumer Protection Law in the country. However, president Bukele’s tweet on August 23 runs foul of the provisions of the law concerning compulsory adoption. In his tweet, the president had declared that adoption will be voluntary. It remains to be seen if he just paid lip service via his tweet or was being honest. Perhaps Article 7 of the Bitcoin Law might be amended to suit president Bukele’s intention.
“If someone wants to continue to carry cash, not receive a sign-on bonus, not win over customers who have bitcoin, not grow their business and pay commission on remittances, they can continue to do so.”
Opposition Berates El Salvador Government for Contradiction
Interestingly, the opposition of the incumbent government has called the latter out over its failure to address the inconsistency in facts. A representative of an opposition party even accused the El Salvadoran government of lying. Lawmakers in the country may have to amend Article 7 immediately if it becomes effective to forestall confusion over adherence in the coming months.
70% of El Salvador Vote Against Bitcoin Adoption, Poll Reveals
A recent protest against the adoption is indicative of the growing dissatisfaction among locals. Given that a large percentage of the El Salvadoran population remains unbanked to date, the difficulty in understanding might be the backdrop of disapproval. In light of this, a survey found that 70% of El Salvadorans disapprove of the Bitcoin law and want it to be repealed. While 99% of the survey respondents think that adoption should be optional or voluntary.
The former suggestion is not likely to happen as the Central American country has come a long way since its landmark decision in June. President Nayib Bukele has also proposed distributing $30 worth of Bitcoin to locals who sign up on the national Bitcoin wallet. Citing the ease of remittances, president Bukele asserted that the adoption of the top crypto asset was important.
However, several experts including international organizations like IMF and the World Bank have severely warned what Bitcoin adoption bodes for El Salvador’s economy.
Meanwhile, sister countries, Paraguay and Mexico are waiting to see what will become of Bitcoin adoption in El Salvador before taking further actions concerning a Bitcoin law in their respective legislative houses.