International Monetary Fund yesterday Announce They reached a $1.4 billion loan deal with El Salvador. In contrast, the Central American country that introduced legal Bitcoin in 2021 has had to remove some of its pro-Bitcoin policies.
I spent about three months in El Salvador around the time the Bitcoin law went into effect. I thought at the time that this was a positive development for the country, but there were aspects of the law that I did not like very much. Exactly these aspects are now removed.
Most importantly, Salvadoran merchants will no longer be obligated to accept Bitcoin. great! I don’t think Bitcoin should be forced on anyone, and I don’t think Bitcoin needs to be. Bitcoin is an emerging form of free market money, and must be adopted voluntarily.
(In practice, this aspect of the law was barely enforced anyway. I heard from an insider that some large fast food chains received phone calls from the government asking them to comply — which explains why McDonald’s and Wendy’s did so.) But other than that, I don’t think any merchants have gotten in trouble for not accepting Bitcoin.)
In addition, El Salvador will have to terminate its Chivo wallet operations. The software may have improved over the years, but in 2021 the wallet was incredibly buggy; The open source and free market community is better able to build such tools. Good riddance!
However, it is a bit disappointing that Salvadoran citizens will no longer be able to pay taxes in Bitcoin – although again I doubt many will. However, this is probably nothing more than an annoyance. Now, merchants who accept Bitcoin need to sell some of their Bitcoin for US dollars before paying the tax collector.
To succeed, Bitcoin benefits from a level playing field. El Salvador is still going a long way in providing this.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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