On Tuesday, June 8, El Salvador became the first country in the world to adopt\u00a0Bitcoin as legal tender.\u00a0That is, as\u00a0a\u00a0regulated and accepted means of payment under certain circumstances throughout the national territory.<\/p>\n
The news does not stop surprising locals and strangers, since\u00a0one of the main motivations\u00a0of its creator\u00a0Satoshi Nakamoto\u00a0(pseudonym of its author or authors)\u00a0in 2008,\u00a0was the decentralization of a currency as a means of payment between peers, which would allow its free circulation\u00a0without a central authority authorizing said transactions.<\/u><\/p>\n
It is\u00a0contradictory\u00a0to the\u00a0libertarian spirit with which that currency was born, that a Law would force the\u00a0citizens\u00a0of a given country to\u00a0accept\u00a0it as payment.\u00a0However,\u00a0before tackling this\u00a0aspect,\u00a0I would refer\u00a0to other aspects and benefits of the Law,\u00a0especially\u00a0because\u00a0Bitcoin\u00a0did not need a Law to circulate within El Salvador;\u00a0and\u00a0proof of\u00a0this,\u00a0is the project \u201cBitcoin Beach\u201d driven by Michael Peters\u00a0and Jorge Valenzuela\u00a0since 2019\u00a0at El Zonte Beach, La Libertad.<\/p>\n
Therefore, said Law,\u00a0in our opinion\u00a0,\u00a0meets other objectives such as:\u00a0a)\u00a0the promotion\u00a0and specialization in the\u00a0use of this\u00a0cryptocurrency\u00a0to replace traditional money,\u00a0better\u00a0known in the world of cryptocurrencies as\u00a0fiat\u00a0<\/em>money\u00a0;\u00a0b) a\u00a0potential\u00a0growth of our economy\u00a0by attracting new investors\u00a0or foreigners,\u00a0who\u00a0have great fortunes in said cryptocurrency\u00a0but few places to exchange it for goods or services, as will be the case in our country;\u00a0c) an\u00a0additional means to achieve greater\u00a0financial inclusion,\u00a0to the extent that access to this technology is also guaranteed\u00a0to the largest number of the\u00a0population;\u00a0d) a decrease in the cost of financial transactions and financing, whether granted to the public or private sector;\u00a0and,\u00a0e) from a political perspective,\u00a0an alternative to sending the remittances that sustain our economy, in the event that the United States Government imposes restrictions or\u00a0in any way\u00a0taxed\u00a0said cash flow\u00a0to our country.\u00a0Separate mention deserves the\u00a0ambitious thesis that consists of the use of Bitcoin as\u00a0a financing alternative for external debt,\u00a0exposed in the Book “USE OF CRYPTOCURRENCY AS AN ALTERNATIVE OF FINANCIAL RELIEF TO SALVADORAN EXTERNAL DEBT”, written by\u00a0Mardo\u00a0Iv\u00e1n L\u00f3pez, Nelson Ernesto Rivera, Pedro Ernesto Dom\u00ednguez and Kimberly Michelle Sandoval,\u00a0Faculty of Jurisprudence and Social Sciences, University of El Salvador.<\/p>\n But why would we adopt such a volatile\u00a0cryptocurrency\u00a0like\u00a0Bitcoin?\u00a0In this section, I think it is convenient to take a step back and see the photograph more widely.\u00a0Bitcoin\u2019s value has increased exponentially over the last 10 years.\u00a0Just 5 years ago,\u00a0it became more volatile due to speculation, the same flaw that accompanies the volatility of any currency or financial asset;\u00a0Not to mention interest, where we are given a rate speculating our level of risk.\u00a0We are told that Bitcoin has fallen by 50% in recent months.\u00a0True, because in the same period it also rose\u00a0by the same percentage\u00a0from the day Elon Musk announced that Tesla, one of the companies with the\u00a0greatest\u00a0exposure in the international media, would accept Bitcoin as a means of payment.\u00a0What was speculated\u00a0would be followed by more and more companies.\u00a0However, in an unexpected twist – for us,\u00a0since very\u00a0little could have\u00a0been\u00a0foreseen- Elon himself announced months later that he would stop accepting Bitcoin due to the energy cost involved in maintaining such technology.\u00a0This announcement was followed\u00a0by the restrictions\u00a0on the use\u00a0of\u00a0Bitcoin\u00a0imposed by\u00a0the People’s\u00a0Republic of China.\u00a0As a\u00a0result of the above,\u00a0the\u00a0price\u00a0went back\u00a0to where it\u00a0was before\u00a0such\u00a0events, which is known as its\u00a0“floor price”.<\/p>\n What determines the increase in the price of Bitcoin?\u00a0Fundamentally, we\u00a0believe\u00a0that\u00a0there are\u00a0two separate forces:\u00a0on the one hand, the number of people who want to get hold of said asset (demand);\u00a0and on the other, how many people accept said asset in exchange for a good or service (offer).\u00a0To the extent\u00a0the\u00a0more people want to\u00a0grab a small portion of Bitcoin, and to the extent that more and more businesses accept that currency as payment, the price of the currency will increase its\u00a0value.\u00a0From the\u00a0latter, the trend should be to continue rising, especially if it is\u00a0conceivable that other Latin American countries, as we heard\u00a0this week, are announcing that will evaluate\u00a0this strategy to be implemented also in their countries.<\/p>\n Going back to the Law, where one of its most controversial aspects is\u00a0Article 7, which establishes that “every economic agent must accept bitcoin as a form of payment when it is offered to them, by whoever acquires a good or service.”\u00a0<\/em>In\u00a0accordance\u00a0with Art. 2 of\u00a0the Competition Law, it is considered as an economic agent “to\u00a0any natural or legal person, public or private, dedicated directly or indirectly to an economic activity for profit or not\u201d. <\/em>Therefore,\u00a0this obligation covers basically\u00a0anyone involved in the exchange of a good or service to\u00a0accept\u00a0Bitcoin as payment after the 90 days\u00a0preceding the entry into\u00a0force\u00a0of this Act.\u00a0To this respect it is unknown\u00a0yet whether there will be sanctions for those who refuse to do so, or\u00a0other measures that could\u00a0help to mitigate the risks associated with currency volatility,\u00a0which we\u00a0hope will\u00a0be included\u00a0in Regulation that effect is issued.<\/p>\n On the other hand, another\u00a0controversial\u00a0article\u00a0is Art. 13, which establishes that \u201cAll obligations in money expressed in dollars,\u00a0existing prior to the effective date of this Law<\/u>, may be paid in Bitcoin.”<\/em>\u00a0Which\u00a0conflicts with the will of all those creditors who, without knowing it, today could be forced\u00a0to\u00a0accept a means of payment that did not exist when the obligations that\u00a0today\u00a0give cause to said payments were born.<\/p>\n Ultimately, this matter raises us all a series of challenges that we face as a\u00a0society, since no currency or means of payment is existing “chemically pure”, and all are to some extent manipulable by individuals or groups of people in power.\u00a0The decision at least puts us on the world map, to take advantage of it in the best possible way.<\/p>\n Piero Rusconi Bola\u00f1os<\/strong><\/p>\n CENTRAL LAW in El Salvador<\/p>\n","protected":false},"excerpt":{"rendered":" On Tuesday, June 8, El Salvador became the first country in the world to adopt\u00a0Bitcoin as legal tender.\u00a0That is, as\u00a0a\u00a0regulated and accepted means of payment under certain circumstances throughout the national territory. The news does not stop surprising locals and strangers, since\u00a0one of the main motivations\u00a0of its creator\u00a0Satoshi Nakamoto\u00a0(pseudonym of its author or authors)\u00a0in 2008,\u00a0was […]<\/p>\n","protected":false},"author":4,"featured_media":9203,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ofc_meta_disable_footer_callout":"","ofc_meta_callout_button_url":"","ofc_meta_callout_button_txt":"","ofc_meta_callout_text":"","ofc_enable_fullscreen":"disable","ofc_fullscreen_speed":0,"ofc_fullscreen_nav":"enable","ofc_fullscreen_nav_pos":"right","ofc_fullscreen_nav_color":"","ofc_fullscreen_nav_tooltip_color":"","ofc_fullscreen_responsive":0,"osh_disable_topbar_sticky":"default","osh_disable_header_sticky":"default","osh_sticky_header_style":"default","osh_sticky_header_effect":"","osh_custom_sticky_logo":0,"osh_custom_retina_sticky_logo":0,"osh_custom_sticky_logo_height":0,"osh_background_color":"","osh_links_color":"","osh_links_hover_color":"","osh_links_active_color":"","osh_links_bg_color":"","osh_links_hover_bg_color":"","osh_links_active_bg_color":"","osh_menu_social_links_color":"","osh_menu_social_hover_links_color":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"off","ocean_gallery_id":[],"footnotes":""},"categories":[49],"tags":[],"class_list":["post-9202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-el-salvador-2","entry","has-media"],"_links":{"self":[{"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/posts\/9202","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/comments?post=9202"}],"version-history":[{"count":1,"href":"https:\/\/central-law.com\/en\/wp-json\/wp\/v2\/posts\/9202\/revisions"}],"predecessor-version":[{"id":9204,"h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