JAKARTA – El Salvador plans to legalize Bitcoin as a legal transaction and payment tool in his country. However, some say that these efforts will not end dollarization in the economic crisis in Central America.
“The dollar will continue to be the legal tender in El Salvador. Operations can be carried out with Bitcoin in terms of its value in dollars”, said El Salvador Secretary of Commerce and Investment, Miguel Kattán.
Kattán said that goods will still be priced in dollars. He described that tomatoes priced at 20 cents would remain 20 cents even if purchased using Bitcoin.
Kattán is trying to reassure El Salvadorans who are worried that their country will completely switch to the Bitcoin standard. He said the price of goods will continue to use dollars and not use the smallest unit of Bitcoin, Satoshi even though purchases can use Bitcoin.
Surely this decision has caused social confusion in society. José A. Barrera, a local journalist said "very few people know about cryptocurrencies".
"Let's say it (Bitcoin) is not a popular topic (in El Salvador)", he added. The plan has become a hot topic on social media in El Salvador.
“In social networks and discussions, people associate or think they (should) own Bitcoin”, once the bill was passed into law.
The confusion of El Salvadorans is due to the difference in the value of Bitcoin with the minimum wage of 300 US dollars per month. Because Bitcoin can be divided by an eighth decimal, the smallest unit is called Satoshi, so this will confuse people who are not used to using crypto money.
In addition, Barrera revealed that Bitcoin may be worthy of being a transaction tool in El Salvador. This is due to the large number of citizens who are already connected to the digital economy network.
"However, we will have to wait to find out what conditions will be in the bill, which will surely pass as proposed by Nayib Bukele".
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On the other hand, El Salvador president Nayib Bukele said that “Bitcoin will not replace the dollar.” Bukele was appointed president in 2016. Previously he served as mayor of San Salvador.
“What the law says, at the end of the day, is that you can pay—if the person billing receives Bitcoin and if the person paying wants to use Bitcoin,” Kattán said in a statement.
However, Kattán explained that the Bill legalizes Bitcoin as a transaction tool in El Salvador, the bill will also discuss the protection of the public against money laundering activities.
Kattán rates positively the use of Bitcoin in EL Salvador. According to him, Bitcoin will provide significant growth to the country's economy, one of which is through the "Bitcoin Beach". There, people can pay for hotels, buy goods in shops, restaurants, and so on using Bitcoin via the Lightning network at low fees.
“There is no difference from what we have today”, Kattán said. For its merchants and consumers, “their relationship will always be with the dollar”.
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