The IMF yesterday announced They have reached a $1.4 billion loan agreement with El Salvador. In exchange, the Central American country that made bitcoin legal tender in 2021 had to eliminate some of its pro-Bitcoin policies.
I spent about three months in El Salvador when the Bitcoin law came into effect. So I thought it was a positive development for the country, but there were aspects of the law that I didn’t like very much. Exactly these aspects are now being eliminated.
Most importantly, Salvadoran merchants will no longer be required to accept bitcoins. Excellent! I don’t think Bitcoin should be imposed on anyone, nor do I think Bitcoin needs that. Bitcoin is an emerging form of free market money and its adoption should be voluntary.
(In practice, this aspect of the law was barely enforced anyway. A relatively close insider told me that some of the big fast food chains received phone calls from the government asking them to comply, which would explain why McDonald’s and Wendy’s did so. they did). (but otherwise, I don’t think any merchants have had problems for not accepting bitcoins).
In addition, El Salvador will have to close the operations of its Chivo wallet. Maybe the software has improved over the years, but in 2021 the wallet was incredibly buggy; the open source community and free market are much more capable of creating these types of tools. Have a good trip!
That said, it is a bit disappointing that Salvadoran citizens can no longer pay taxes in bitcoins, although I doubt many would. However, this is probably little more than an annoyance. Now, merchants who accept bitcoins must sell some of their BTC for USD before paying the taxman.
To be successful, Bitcoin benefits from a level playing field. El Salvador is still far from offering precisely that.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
