El Salvador made history by becoming the first country in the world to adopt Bitcoin as a legal tender. However, the integration of the new financial services has sparked protests and resentment amongst citizens.
The first day of Bitcoin adoption in El Salvador was marked by a number of problems related to citizen outrage and technical glitches. Key platforms such as Apple and Huawei did not offer the option of using the government-promoted Chivo cryptocurrency wallet, and the application servers were so overloaded by the influx of users wishing to register that they simply stopped working.
El Salvador’s adoption of BTC was marked by a sudden drop in value of the largest digital asset. As Bitcoin dropped from $52,000 to $43,000, Salvadorans lost about $3 million (~£2.1 million) of their savings in just one hour.
At the moment, BTC is accepted by businesses across the country, on a par with the US dollar. El Salvador has a population of around 6.4 million and due to the government’s decision every citizen has received a $30 (~£21) bonus in BTC.
The Bitcoin initiative is a part of an economic experiment by Nayib Bukele, the country’s president. In his opinion, such an approach will help El Salvador to save up to $400 million (~£290 million) a year, which usually goes to pay fees for international money transfers made by citizens.
Even though the use of the first cryptocurrency is not a mandatory requirement for everyone, the initiative to legalise BTC still drew a flurry of criticism from opposition politicians and citizens. They accuse Bukele of leaving his people in the dark and not explaining to people how he thinks the new system should work.
Many citizens gathered for a protest outside the country’s Supreme Court and started blowing up fireworks and burning tyres there.
According to CityAM, opposition politician Johnny Wright Sol told the BBC that the new currency plans were hastily announced by the government and are not suitable for nationwide use.
“The Bitcoin law was approved in parliament with hardly any debate. It took only about five hours to go through. We’re not cryptocurrency or Bitcoin haters, but we don’t believe that it should be compulsory that businesses should be obligated to accept Bitcoin in payment. The state is backing these payments and assuming the risk but at the end of the day us taxpayers are all the state,” he said.
Thus, El Salvador became the first country in history to adopt Bitcoin as a legal tender. Although all citizens have been given bonuses, not everyone is satisfied with the innovation. Waves of protest are sweeping in the country, involving both big businesses and individuals. Let’s see how the market reacts.
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