El Salvador is moving ahead with its plan to make Bitcoin legal tender by creating a $150 million USD trust.
The goals of the fund are varied, but it will be used to roll out a network of nationwide Bitcoin ATMs, educate the nation on how to use the “Chivo” Bitcoin app, and also airdrop $30 million worth of Bitcoin.
Perhaps most importantly, the fund will act as an exchange for anyone in El Salvador that wants, for whatever reason, to use US dollars instead of Bitcoin.
El Salvador has seen protests in recent days against the government’s move to adopt Bitcoin as a legal tender currency – and these fears may have more to do with perception than reality.
It should be noted that there are no shortage of USD-linked stablecoins, all of which can be used with most mobile crypto wallets.
The President of El Salvador, Nayib Bukele, commented,
“Nobody will receive Bitcoin if they don’t want it… If someone receives a payment in Bitcoin they can choose to automatically receive it in dollars.”
A good round of education on how decentralized assets actually work is probably needed in El Salvador. Bitcoin is perhaps the most flexible asset on the planet, and can be traded for thousands of assets, including USD-backed stablecoins.
The System Doth Protest Too Much, Methinks
El Salvadorian retirees aren’t alone in voicing their skepticism of the nation’s plan to adopt Bitcoin as legal tender.
The global mainstream media has been on fire this week with stories that are almost wholly negative on the move, and numerous official institutions are warning on the new policy.
Let’s get this out of the way up front – no one is forcing people in El Salvador to accept only Bitcoin. Shops in the nation have to accept Bitcoin, but the citizens can hold Bitcoin, US dollars, or a range of other assets.
If a business wants to get rid of the Bitcoin they accept from clients they can. Bitcoin moves fast, and can be traded out for USD-backed assets immediately if need be.
For most businesses, a daily swap for USD would likely be enough – as the Bitcoin market generally doesn’t move that quickly.
As far as the international outcry against the adoption of Bitcoin goes…there may be more worrying forces at work.
Statements like this from the IMF may be cause for concern
“The most direct cost of widespread adoption of a cryptoasset such as bitcoin is to macroeconomic stability. If goods and services were priced in both a real currency and a cryptoasset, households and businesses would spend significant time and resources choosing which money to hold as opposed to engaging in productive activities.”
So…people choosing to use different money is a threat to – macroeconomic stability?
The Price of Power
We can’t be sure what system the IMF is describing – but one thing is for sure – the global power structure hates cryptos.
People at the top love their central banks and fiat currency, as it gives them a powerful tool that can be used to control the masses via access to capital and financial services, among many other things.
The last 15 years have been a perfect example of how central banks use fiat currency to keep the rich getting richer, and lock the poor into perpetual servitude.
The systemic risk – far from being Bitcoin – is social inequality.
Bitcoin isn’t a silver bullet. Nor is Bitcoin perfect. While it is the most valuable token when measured by market cap, it is also the most archaic in terms of technology.
Like Ford’s Model T – Bitcoin demonstrated to the world what is possible.
Now, that possibility is being extended into state policy in El Salvador – and the established system sees an existential crisis on the horizon.
The mistake that groups like the IMF makes is seeing cryptos as the threat itself – they aren’t. Cryptos are simply a symptom of a much larger social trend, which won’t be stopped.