[HN Gopher] El Salvador to adopt Bitcoin as legal tender
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El Salvador to adopt Bitcoin as legal tender
Author : ncpa-cpl
Score : 53 points
Date : 2021-06-05 21:43 UTC (1 hours ago)
(HTM) web link (www.cnbc.com)
(TXT) w3m dump (www.cnbc.com)
| lowkey wrote:
| Though not mentioned in the article, the President of El
| Salvadore apparently also mentioned that the country plans to
| hold Bitcoin as a reserve asset.
| elevenoh wrote:
| Happen to know whether ElSalv did covertly did most of their
| purchasing before announcing this? Or have they not purchased
| btc just yet?
| lowkey wrote:
| The law hasn't taken effect yet. Apparently it will go to a
| vote in parliament next week. I'm honestly not sure but would
| suspect they haven't bought yet but will soon have the legal
| ability too.
| emc3 wrote:
| Probably not unrelated: US report: Allies of El Salvador's
| president deemed corrupt (last month)
| https://apnews.com/article/latin-america-el-salvador-1d089ae...
| kragen wrote:
| It wouldn't be surprising if the US government were to take
| actions against governments that were moving away from the
| dollar, whether as legal tender, as foreign reserves, but it
| doesn't seem likely that the USG knew about this move a month
| in advance. Are you suggesting that the Salvadorean president
| is attempting to retaliate for the report by dedollarizing?
| cperciva wrote:
| Nothing to do with retaliation. They just want to protect
| their assets from being seized by the US government.
| kragen wrote:
| Hmm, are you suggesting that the US could overthrow their
| government, either by invasion as in Panama or by funding a
| terrorist campaign as in Nicaragua, and that Bitcoin would
| be more secure than suitcases of dollar bills against such
| actions? Surely not that the US would dramatically devalue
| its own currency in order to drain El Salvador's reserves?
| Or are you thinking that dollar-denominated reserves held
| in overseas banks would be easier for the US to seize, and
| Bitcoin avoids the need to hold the reserves overseas?
| 6foot4_82iq wrote:
| America extorts other nations by virtue of the $US being the
| world's dominant reserve currency. The federal reserve can
| print money unimpeded, with foreigners bearing the brunt of
| inflation. The math is simple.
| ncpa-cpl wrote:
| El Salvador is looking to introduce legislation that will make it
| the world's first sovereign nation to adopt bitcoin as legal
| tender, alongside the U.S. dollar.
|
| In a video broadcast to Bitcoin 2021 President Nayib Bukele
| announced El Salvador's partnership with digital wallet company,
| Strike, to build the country's modern financial infrastructure
| using bitcoin technology.
| thinkmassive wrote:
| This is good news, but note that Japan already declared Bitcoin
| as legal tender in 2017
|
| https://www.coindesk.com/japan-bitcoin-law-effect-tomorrow
| kragen wrote:
| https://archive.fo/Gb8Wo
|
| It looks like Japan did not, in fact, declare Bitcoin to be
| legal tender ("a form of money that courts of law are
| required to recognize as satisfactory payment for any
| monetary debt"). Rather, it imposed a regulatory regime on
| Bitcoin exchanges.
| notahacker wrote:
| Legal tender, properly defined, means that someone you're in
| debt to _must_ accept it as means of payment to discharge the
| debt. Afaik Japanese lenders can still insist on Yen, and
| almost invariably do
|
| I suspect this will be the same (in practice if not in
| theory). You can pay people in Bitcoin, or if they don't
| actually want Bitcoin the president's buddy is hyping an app
| that will let them get USD instead when you send your
| satoshis...
| teachingassist wrote:
| 'Legal tender' means that you are [everyone is] obliged to
| accept bitcoin as a means of settling any debt.
|
| (That would be a nightmare - in my opinion, it would at least
| require some kind of official exchange rate between Bitcoin
| and yen.)
| smoldesu wrote:
| > Bukele said the country is partnering with digital wallet
| company, Strike, to build modern financial infrastructure using
| bitcoin technology.
|
| Wow, this seems like an incredibly shitty situation for the
| people of El Salvador. It looks like some lobbyists got hired by
| a wallet company stacked with angel investors willing to pour
| money into the idea of being integrated into the government at
| such a low level. I wouldn't be surprised if they also announced
| that all transactions will be forced to go through a wrapper or
| other type of layer, maybe even justified with the classic "think
| of the coal" argument...
| jpxw wrote:
| I wonder why a country would choose Bitcoin as legal tender when
| better, faster, more environmentally friendly cryptos exist (ones
| which can feasibly be used to transact money in real-time, for
| instance).
| smoldesu wrote:
| Mostly adoption purposes. Bitcoin, for better or worse, is now
| a globally recognized asset (if not _official_ recognized).
| Sure they could adopt a coin like Ripple or Doge, but that
| would almost certainly permanently sabotage the market for both
| respective coins. While I agree that this is a bad idea, basing
| it on a larger currency does have some considerable economic
| benefits.
| rawtxapp wrote:
| When you consider a country-wide currency or global reserve
| currency status, things like security/trust are the most
| important properties.
|
| You can then use other layers for much faster and cheaper
| transactions while keeping the base layer as is (as lightning
| network on BTC and zk-rollups on ETH are doing, or even
| centralized layers like Paypal/Visa, etc).
| geofft wrote:
| Bitcoin's lobbyists are better paid because Bitcoin got people
| richer.
| bratao wrote:
| What would happen to the markets if Satoshi appeared and starts
| trading his 1 Mi in BTC?
| temp10298385 wrote:
| As someone who readily admits to not fully knowing what legal
| tender entails, I have a question for the optimists:
|
| As I understand it, legal tender status forces creditors to
| accept bitcoin as debt repayment. Given the volatility of
| bitcoin, wouldn't this impact risk assessment of loans? Being
| obligated to accept a high volatility asset as a repayment sounds
| like a nightmare for creditors. Wouldn't interest rates rise in
| order to cover this added uncertainty?
| jerf wrote:
| Accepting it as legal tender doesn't mean it is what the loans
| are denominated in. Nobody sane would denominate loans in
| BitCoin. (There are loans denominated in BitCoin. The obvious
| syllogism applies.)
| squiggleblaz wrote:
| But if I have a loan for a value that corresponds to about 1
| bitcoin and $53, then doesn't legal tender mean I have to
| accept 1 bitcoin and $53 in exchange for it? The fact that
| tomorrow the value will be 1 bitcoin and $196 seems
| irrelevant.
|
| And this is significant: debtors could repay their debts when
| bitcoins look like they will decrease in value with respect
| to the currency of denomination with an intent to harm the
| debt owner.
|
| In the 19th century, there were dual currency systems with
| fluctuating exchange rates. I don't know anything about why
| they failed, just that they failed...
| Beached wrote:
| they would be forced to accept it, however they would likely
| instantly convert it to a more stable currency at the time of
| payment through some processor.
|
| there will likely be a small fee to them for the conversion of
| Bitcoin to say, USD, but I imagine it would be similar to
| accepting credit cards for payment? and so it would be worked
| into the prices.
| fungiblecog wrote:
| This will not end well for El Salvador
| rawtxapp wrote:
| Even though the market hasn't really reacted to this news (which
| I suspect is due to the fact that it's proposed/didn't happen
| yet), this is one of the most bullish news in a very long time in
| my opinion (even more bullish than companies buying into it). I
| suspect this will start the domino effect of countries slowly,
| but surely adopting BTC.
|
| It'll probably be the smaller countries first where they don't
| have great currencies to begin with, so they'll always have to
| use a foreign one, either USD or an alternative. With USD, they
| are at the mercy of USG and will get pushed around by them. With
| Bitcoin, the network itself is kept safe with all the energy and
| mathematical properties, but the price is very volatile at the
| moment, though volatility will decrease with increasing market
| caps.
|
| This will be a very interesting experiment to watch.
| Geee wrote:
| Here's the emotional announcement by Jack Mallers (founder of
| Strike) who worked with the president of El Salvador to make this
| happen: https://www.youtube.com/watch?v=2V8y_IV7XU8&t=76s
|
| It's worth a watch to understand the story.
| smoldesu wrote:
| I only skimmed through, but it looks astronomically light on
| details with lots of Pathos tying it all together. If I was a
| journalist in that audience I'd be terrified.
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(page generated 2021-06-05 23:00 UTC)