Updated: Sep 19, 2021
And what it means for the future of Bitcoin
Protestors of Bukele's controversial Bitcoin adoption destroyed a Bitcoin ATM at the National Palace.
On Wednesday, September 15th, the Independence Day of El Salvador, protestors of the El Salvadorian President Nayib Bukele and his controversial law, legalizing the cryptocurrency Bitcoin (BTC), as legal tender, torched a Bitcoin ATM at the National Palace.
This organized protest by dissidents of Nayib Bukele and his Bitcoin law marked the latest protest of a series of demonstrations organized in El Salvador. Challengers of Nayib Bukele, and critics of Bitcoin, have “joined forces” to organize demonstrated protests, which they have claimed to be peaceful, although reports of vandalism and assaults at the protests have emerged.
President Bukele promises to fix the bugged rollout of the government's Bitcoin wallet, Chivo.
Although the adoption of Bitcoin as legal tender in a sovereign nation was a big win for Bitcoin maximalists, the price of Bitcoin did not reflect this attitude, with the price dropping more than 16% from its height of 52.7K. The price has since stabilized from the “flash crash”, and is consolidating for a potential breakout to 52K (according to our technical analysis).
The national adoption of Bitcoin in a sovereign nation served as evidence that the adoption of cryptocurrency is possible, and could even improve the living conditions and livelihoods of people. In fact, reports indicate this is true. According to a financial report, the adoption of Bitcoin as legal tender in El Salvador could cost Western Union and Money Gram, an astounding amount of 400 million USD, in remittance costs. As 70% of Salvadorians rely on remittances, Bitcoin would allow abroad citizens to send money and remittances back to El Salvador for a fraction of the price that Western Union or Money Gram would charge.
Although the adoption of Bitcoin should benefit the majority of El Salvadorians, there is a flip side to the argument, one that highlights the detriments and cons associated with El Salvadorian's cryptocurrency adoption.
Could the El Salvadorian adoption of Bitcoin expand President Bukele's power over the country's financial assets?
Many critics of the Salvadorian president have claimed Bukele's adoption of Bitcoin to be a front to gain more power and control over the citizens of El Salvador. Nationalizing Bitcoin as legal tender would force businesses to use the government-controlled app Chivo, and would persecute dissidents who resisted the overreaching government control via Bitcoin adoption. This could be extremely harmful to El Salvador's citizens, as it would increase governmental jurisdiction in the financial sphere, and would expand President Bukele's power.
Some might argue that Bukele's forced adoption of Bitcoin is detrimental to cryptocurrency and its global adoption in general. With so many protestors and dissidents emerging from El Salvador's Bitcoin adoption, other countries might hesitate and think again before taking the Bitcoin pill.