El Salvador opposition challenges Bitcoin (BTC) adoption law

A political party in El Salvador has challenged the new Bitcoin (BTC) law promoted by President Bukele and filed a lawsuit claiming the project is unconstitutional. The opposition believes adopting BTC as a legal tender would be detrimental to the country.

No legality and zero foundation

If the opposition wins in the country’s courts, the President’s plan to integrate Bitcoin into the Salvadorian financial ecosystem will likely fall apart. The Bitcoin law must therefore be proven to be constitutional before any further moves towards adoption. The Farabundo Martí National Liberation Front (FMLN) party, together with a group of El Salvador citizens, has lodged a complaint against President Nayib Bukele’s Bitcoin adoption programme. Allegedly unconstitutional, they claim the new law might negatively affect the country. For Jaime Guevara and Óscar Artero, spokesmen for the FMLN, this initiative lacks legality and has no foundation. It should be noted that this political party won 7% of the votes in the legislative elections last February. The FMLN came third, following the Nationalist Republican Alliance, which holds 8% of the vote. The plaintiff also pointed out that this complaint will test the magistrates newly appointed to the Constitutional Chamber of El Salvador.

Salvadorians not yet ready for Bitcoin

Enrique Anaya commented on the lack of clarity on how to implement the Bitcoin law. Despite its approval on 9th June, this Salvadorian lawyer is worried the lawmakers may have initiated the lawsuit themselves. In his turn, Jaime Guevara stated that he does not approve of President Bukele’s rush to advance his party’s agenda. It would put the public in a bad position and adversely affect their interests. Earlier in June, the Chamber of Commerce and Industry of El Salvador has conducted a study indicating more than 80% of Salvadorians would not agree to receive payments in Bitcoin. In an effort to unite the public, the Minister of Labour and Social Protection, Rolando Castro, admits the country is not yet ready for this change.

With the World Bank’s opposition to El Salvador’s adoption of Bitcoin as a legal tender, the list of obstacles a country would face – should it decide to go El Salvador’s route – is likely to continue growing. Besides, the issue of volatility doesn’t help the situation either. Didn’t BTC drop 7% in the past 24 hours?

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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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