El Salvador wants to make BTC legal tender

[Master Disaster]

The president of the Central American country has just announced plans to make BTC legal tender in the country. Should his plans be approved by congress he claims it would allow the 70% of El Salvadorians who don't have a bank account to have access to financial services and could help boost the countries GDP.

Quote

El Salvador's president says he will make the Bitcoin cryptocurrency legal tender in the country.

 

If his plan is backed by congress, the Central American country would be first in the world to formally adopt the digital currency.

 

It would be used alongside the US dollar, El Salvador's official currency.

 

President Nayib Bukele says Bitcoin will make it easier for Salvadorans living abroad to send payments home.

 

"In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy," Mr Bukele told a Bitcoin conference in Florida, adding that it could also boost investment to the country.

He said he would send the legislation to congress next week.

 

Should it pass, the move would open up financial services to the 70% of Salvadorans who do not have bank accounts, the president said.

Source - https://www.bbc.co.uk/news/world-latin-america-57373058

 

Pretty interesting idea for a relatively poor country however I have reservations about using an unregulated currency as a main currency for the entire country. It makes it very easy for money to disappear without anyone realising.

[emosun]

I dont know why but bitcoin seems like such a fad that I imagine this idea/article will age the same as "El Salvador considering benie babies and furbys as currency"

[Dutch_Master]

What's his ulterior motive? Is this a scheme to legit syphon away crime money from himself and his cronies to tax heavens? Tried and trusted method: if you want something for yourself, present it as something for the people. Unfortunately, most fall for the bait/trap and believe it's actually so....

[Master Disaster]

10 minutes ago, emosun said:

I dont know why but bitcoin seems like such a fad that I imagine this idea/article will age the same as "El Salvador considering benie babies and furbys as currency"

I'm confused, please don't tell me that's a real headline? Did you read that in the Daily Star?

[TetraSky]

Considering how volatile it is, how do they plan to make it legal tender and be accepted by everyone? Imagine this, if a small merchant accept BTC payment for something while BTC is at 50k and the next day it drops to 30k and stays there for weeks because some other country decided to ban it, they've essentially lost 40%. Yes it can also go up and they can make a profit, but as a business, it would make no sense to take that kind of gamble, unless you massively overcharge for BTC payments in case something like that happens. In a poor country, who would pay double, triple the amount for something?

 

I don't understand how 70% of  El Salvadorians don't have a bank account, yet could somehow make a wallet to hold coins ? Don't you need money to first invest in it (unless everyone becomes miners) ?

 

I am also really curious as to what kind of jobs would be created by this. "Bitcoin farm operator" ? Do they even have the electrical capability for this?

 

For now, it sounds to me like this guy was told about Bitcoin by his younger nephew or something and now he's all in without any plan whatsoever.

[WolframaticAlpha]

They might've as well bought aqua regia, used it as legal tender, and called it a day. It is equally volatile

[Master Disaster]

1 minute ago, WolframaticAlpha said:

They might've as well bought aqua regia, used it as legal tender, and called it a day. It is equally volatile

A lot harder to make disappear though TBF.

[Moonzy]

Why? It makes no sense

The transaction fees for low amount transaction is silly, imagine paying $2 to buy $10 of goods from a grocery

[Master Disaster]

14 minutes ago, TetraSky said:

Considering how volatile it is, how do they plan to make it legal tender and be accepted by everyone? Imagine this, if a small merchant accept BTC payment for something while BTC is at 50k and the next day it drops to 30k and stays there for weeks because some other country decided to ban it, they've essentially lost 40%. Yes it can also go up and they can make a profit, but as a business, it would make no sense to take that kind of gamble, unless you massively overcharge for BTC payments in case something like that happens. In a poor country, who would pay double, triple the amount for something?

 

I don't understand how 70% of  El Salvadorians don't have a bank account, yet could somehow make a wallet to hold coins ? Don't you need money to first invest in it (unless everyone becomes miners) ?

 

I am also really curious as to what kind of jobs would be created by this. "Bitcoin farm operator" ? Do they even have the electrical capability for this?

 

For now, it sounds to me like this guy was told about Bitcoin by his younger nephew or something and now he's all in without any plan whatsoever.

He mentioned people living and working in other countries would be able to add funds to a wallet for their families to use back home.

 

Also its not really about job creation, more about investment. Using it as a currency would bring some of the profits back into the countries pot through people investing in the infrastructure and (I would guess) through fees\taxation.

[Master Disaster]

6 minutes ago, Moonzy said:

Why? It makes no sense

The transaction fees for low amount transaction is silly, imagine paying $2 to buy $10 of goods from a grocery

Also imagine going to bed with $100 in the bank and waking up with $10, all because Elon made another tweet during the night.

[Drama Lama]

doesn't bitcoin need a lot of time for validating transactions? (at least small ones) that would make bitcoin, besides very unstable prices rather impractical for everyday use.

please correct me if I'm wrong.

[Master Disaster]

Just now, Drama Lama said:

doesn't bitcoin need a lot of time for validating transactions? (at least small ones) that would make bitcoin, besides very unstable prices rather impractical for everyday use.

please correct me if I'm wrong.

The country will still use the USD as the primary currency, it would be used as a secondary currency.

[Mihle]

From what I did  read somewhere else, the real reason behind this is that friends of the president and people in government is corrupt, and want to continue with it.

[StDragon]

5 minutes ago, Master Disaster said:

He mentioned people living and working in other countries would be able to add funds to a wallet for their families to use back home.

 

Also its not really about job creation, more about investment. Using it as a currency would bring some of the profits back into the countries pot through people investing in the infrastructure and (I would guess) through fees\taxation.

It's about remittance; which is the outflow of wealth from other nations to El Salvador.

[Drama Lama]

1 minute ago, Master Disaster said:

The country will still use the USD as the primary currency, it would be used as a secondary currency.

yea, but how about transactoin times with bitcoin? I heard they are pretty slow compared to online banking.

[TetraSky]

9 minutes ago, Master Disaster said:

He mentioned people living and working in other countries would be able to add funds to a wallet for their families to use back home.

Ah, I see. Yeah, if a lot of people do this, I suppose it would be somewhat a good way to bypass the banks while sending money to your family in the poorer country.

[BuckGup]

2 hours ago, emosun said:

I dont know why but bitcoin seems like such a fad that I imagine this idea/article will age the same as "El Salvador considering benie babies and furbys as currency"

Bitcoin isn't a fad. It's been around since 2009 and the idea of proof of work algorithms predate that much further. It's simply societal changes. Beanie babies are simple supply/demand with some pizzazz of hype. Bitcoin is completely different 

[Brooksie359]

8 hours ago, Master Disaster said:

He mentioned people living and working in other countries would be able to add funds to a wallet for their families to use back home.

 

Also its not really about job creation, more about investment. Using it as a currency would bring some of the profits back into the countries pot through people investing in the infrastructure and (I would guess) through fees\taxation.

You understand what legal tender means right? It means it is required to be accepted. This has huge implications to anyone who owns a business. If handled poorly the business owners could end up losing alot of money on bitcoin transactions. Lets say a business pays 10 dollars for a good so that they can sell it in their store for 12 dollars and make a 2 dollar profit. If that is done it bitcoin there is a fairly high probability that they would end up losing money because bitcoin dropped in value after the transactions is made. There is also the issue of whether they could legally charge significantly more for bitcoin based purchases. If they can't then you have a huge issue on your hands.

[whm1974]

8 hours ago, BuckGup said:

Bitcoin isn't a fad. It's been around since 2009 and the idea of proof of work algorithms predate that much further. It's simply societal changes. Beanie babies are simple supply/demand with some pizzazz of hype. Bitcoin is completely different 

It is still a Fad. Just because something has been around for 12 Years doesn't make it any less of a Fad.

[Helpful Tech Witch]

11 hours ago, emosun said:

I dont know why but bitcoin seems like such a fad that I imagine this idea/article will age the same as "El Salvador considering benie babies and furbys as currency"

except beanie babies neverwere worth anything morw than what you paid for one (like everyone said they would) when it came out.

bitcoin is woth quite a lot more than when it cam out in 2009. in fact, it was worth 775000000% more than it did when it first traded at its highest point.

edir: not to say i agree wiht this. BTC is too unstable, and really shouldnt be the main currency for anything. if a country wants to base its money off of crypto, then USDT, USDC, paxos gold or some other stablecoin would be a much better idea.

[The Benjamins]

10 hours ago, Moonzy said:

Why? It makes no sense

The transaction fees for low amount transaction is silly, imagine paying $2 to buy $10 of goods from a grocery

I hope this passes so it puts more pressure on the network and forces BTC community to updated it to allow for more transactions per min. which would reduce the transaction fee.
the only reason BTC transaction fee is so high is that there is too many per min for it to handle.

[whm1974]

4 minutes ago, HelpfulTechWizard said:

except beanie babies neverwere worth anything morw than what you paid for one (like everyone said they would) when it came out.

bitcoin is woth quite a lot more than when it cam out in 2009. in fact, it was worth 775000000% more than it did when it first traded at its highest point.

 

Beenie Babies actually exist while Bitcoin and other Crypto does not.

[AndreiArgeanu]

well then shops may need digital price tags just in case Elon Musk sneezes and bitcoin drops another couple thousand while you're shopping for some reason.

[Helpful Tech Witch]

Just now, whm1974 said:

Beenie Babies actually exist while Bitcoin and other Crypto does not.

i mean, it does. tangible =/= existent.

you can be one and not the other.

[The Benjamins]

10 hours ago, Drama Lama said:

doesn't bitcoin need a lot of time for validating transactions? (at least small ones) that would make bitcoin, besides very unstable prices rather impractical for everyday use.

please correct me if I'm wrong.

No, a transaction is see instantly and can be validated at the same time. it is confirmed by the whole network after its in 1 block (10 min) and the community usually deems it as solid after 3-6 blocks deep (30-60 min) 

 

so for a normal store purchases its seen as instant and any big ones it be 1 hour.