El Salvador First Bitcoin Country in the World: Population Hardly Knows What Crypto is
Tomorrow, small El Salvador will get the worldwide first: Bitcoin is the first country in the world to become legal tender there. Other Latin American countries now also want to join the crypto. But many Salvadorans hardly know what bitcoin is and distrust the president.
In recent weeks, the first ‘bitcoin ATMs’ have appeared throughout El Salvador, but Salvadorans can really convert the cryptocurrency into hard dollars or buy bitcoins from tomorrow. The Central American state – half the size of the Netherlands – is the first country in the world to make bitcoin legal tender. The current currency, the US dollar, will also remain valid.
A special event. But the introduction of the virtual currency has also sparked protest in the country, which has a long history of political unrest, corruption and gang violence.
This week, opponents of bitcoin’s adoption took to the streets, fearing that the currency’s wide swings in value leave poor Salvadorans vulnerable. In addition, a well-known critic of the government’s plans was suddenly arrested on suspicion of fraud.
According to a recent poll by the Salvadoran university UCA, nearly 70 percent of Salvadorans are also against the introduction. There is also a lot of uncertainty about cryptocurrency among the population of the Central American country: nine out of ten respondents do not know exactly what bitcoin is.
So why is El Salvador taking this radical step? The controversial Salvadoran president Nayib Bukele says he wants to become less dependent on the dollar through bitcoin and hopes for more investment in El Salvador.
But perhaps the most important asset is the more than two million people of Salvadoran descent living in the US: the money they send to relatives in El Salvador accounts for a fifth of the economy. The president said that if they do this via bitcoin, they will save hundreds of millions of dollars in transaction costs every year.
Therefore, the first bitcoin ATMs would mainly be located in areas where many Salvadorans live with family in the US. Although 70 percent of the residents of El Salvador (almost 6.5 million) do not have a bank account, they can get a ‘wallet’ from tomorrow on which the government will put bitcoin worth 30 dollars.
For example, Salvadorans can pay taxes and loans with bitcoins, while salaries and pensions are still paid in dollars. In addition, some stores already accept bitcoins.