El Salvador officially recognizes Bitcoin - as the first country in the world
Proteste gegen die Einführung von Bitcoin in El SalvadorProteste gegen die Einführung von Bitcoin in El Salvador

This week, El Salvador will become the first country in the world to recognize digital currencies as legal tender.

Millions of Salvadorans, however, have tried to learn about Bitcoin in recent days. Many are rejecting it, and for good reasons.

First of all, plans to introduce Bitcoin have been rushed.

Many people are now scared because there is a lack of information. Some want to exchange Bitcoin for US dollars immediately.

The Latin American country of El Salvador adopted the US dollar as its national currency about twenty years ago. So immediate acceptance of Bitcoin will take time.

What happens if the bitcoin price drops?

According to President Nayib Bukele, who is spearheading plans to adopt Bitcoin, citizens can now buy land, pay taxes and shop with the volatile digital currency.

Crypto enthusiasts believe Bitcoin will improve financial inclusion in the country for those without bank accounts. And even give them access to more lucrative digital assets.

But what if the bitcoin price falls? What happens to poor citizens then?

The Bitcoin movement risks higher insurance and banking costs, a spread of money laundering, fraud, and even economic instability.

The IMF is against the introduction of cryptocurrencies as legal tender. They can jeopardize the country’s financial system. Moreover, it could destabilize commodity prices with significant repercussions.

“We will not use Bitcoin”

Salvadorans are also against the idea. Their anger was evident in last week’s protests. From pensioners to unions, many people do not want to make the currency change.

“We will not use it,” people said on the streets of the capital.

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In the coming days, the government also plans to launch a digital coin wallet aptly named “Chivo” (slang for “cool”). Users will receive $30 for free to encourage adoption.

The Bukele government will set up Chivo ATMs across the country where customers can instantly buy bitcoin or exchange it for dollars – with no fees.

Large retail unBusinesses in El Salvador are preparing to accept Bitcoin in the coming days – expecting brisk sales thanks to the extra liquidity provided by the digital currency.

The government is now mandating that anyone with access to technology must accept Bitcoin this week. However, there is no mention of consequences for non-compliance.

Over the weekend, Bitcoin prices rose again, reaching $52,000 on Tuesday. At that point, Bitcoin was now leading the crypto market with a four-month high. It seemed as bo the trend was expected to continue rising. After that, Bitcoin experienced a sudden crash.