Thousands of people took to the streets to protest against El Salvador’s adoption of Bitcoin as a legal tender. These protests come just a week after the country officially rolled out the new national digital currency, “Chivo”. Let’s take a closer look at these new developments.
Why are El Salvador Residents Opposed to Bitcoin?
Based on the photos and videos posted on social media, the protestors in El Salvador burned down a Bitcoin ATM. They also defaced the Chivo machine with anti-BTC logos in protest against President Nayib Bukele.
The protestors used the demonstration to accuse the president of using authoritarian methods to tighten his grip on power at the same time, expressing their displeasure against the introduction of Bitcoin.
Even before the country officially adopted crypto as a legal currency on September 7, there was a protest organized by opposition groups and another one by pensioners, retirees and workers.
Through a letter, the Popular Resistance and Rebellion Block group expressed concerns that,
- The president passed the cryptocurrency legislation without consultation with the people.
- The digital wallet is too volatile and will only benefit prominent business people in the country who are known for laundering ill-gotten money.
The citizen protest by retirees highlighted their main problems with cryptocurrency. This includes,
- There were concerns that the government would pay their pension using cryptocurrency instead of dollars.
- Bitcoin is too volatile; therefore, they won’t have any control over it.
- A lack of knowledge and technology on how to use cryptocurrency.
- Too little information about the pros and cons of Bitcoin.
How successful was the Bitcoin launch?
Since the cryptocurrency legal tender became a reality, there have been several problems. Initially, the government had encouraged citizens to switch to cryptocurrency by announcing that the digital wallet would come pre-loaded with $30 worth of the currency. Because of this incentive, the digital wallet became overloaded.
In addition, there were technical glitches on the app that prevented the app from working properly on some phones. Because of this, the president also acknowledged that the three months rollout plan was so ambitious.
However, the biggest move that everyone was watching was the Bitcoin price. On the same day that the country adopted the digital coin, the crypto asset price dropped below $43,000, which was unexpected.
While this new move has been marred by protests, an IMF warning and technical glitches, a lot of analysts and investors are curious to see if it will be worth it in the long term.
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