Small groups of protestors have taken to the streets one week before El Salvador adopts Bitcoin as legal currency. According to Business Insider, protests against the Bitcoin law and President Nayib Bukele are becoming more common ahead of it taking effect on September 7th.
The protesters’ reasons for objecting to Bitcoin adoption range from simple political opposition to President Bukele, to concerns about price volatility when denominated in U.S. dollars, to misunderstandings about the new law.
The adoption of the law will be revolutionary, and has the potential to relieve El Salvador of the tireless money printing of the United States. At the very least, Bitcoin will give El Salvadorans another option for transacting and storing their wealth, and perhaps more importantly Bitcoin will give the citizens a new way to receive payments and remittances without commission.
Local San Salvador media sources said that protestors believe Bitcoin will pose a serious threat to El Salvador’s economy, Business Insider reported. One argument is that just as the El Salvadoran Government can’t control the United States debasing their dollars, which they are currently totally dependent on, they won’t be able to control a Bitcoin economy either.
Given the perpetual mishandling and theft of people’s money and time through fiat currencies issued and debased by all governments, it is worth pointing out that it is a net positive for El Salvador’s population that the government cannot control Bitcoin.
The oft-cited argument that Bitcoin is volatile is only valid when you compare it to an asset like the chronically inflating U.S. dollar. Bitcoin itself has a terminal supply cap.
The other pertinent argument against Bitcoin adoption in El Salvador is that it promotes corruption in the form of money laundering and hidden transactions, but this is a total misunderstanding of how Bitcoin works. Every transaction on the Bitcoin ledger is publicly available and traceable at all times, unlike U.S. dollars.
Although the arguments against Bitcoin adoption in El Salvador are quite weak, it remains to be seen what will happen. The financial world will be watching El Salvador’s Bitcoin experiment in the weeks following September 7th. The protesters will retain the right to choose whether and to what extent they use Bitcoin.