All Eyes On El Salvador’s Bitcoin Experiment

0

Last Updated on 8 September 2021 by CryptoTips.eu

Jeroen Kok

Jeroen is one of the lead copywriters on Cryptotips.eu and discusses all recent events in the crypto market. This includes news updates, but also price analyzes and more. He developed his passion for cryptocurrency during the bull run in 2017. He has learned a lot since then. The combination of cryptocurrency and creative writing is perfect for Jeroen and an excellent way to share his knowledge with a wide audience. Find me on LinkedIn / [email protected]
View all posts

Say what you want, but if the populist president of a middle American country manages to capture the attention of worldwide media for an economic experiment, that in itself is a win. Nayib Bukele, the president of El Salvador, seems to revel in the attention of news stations like CNN, MSNBC and BBC as his countrymen become the world’s first citizens to try out Bitcoin as legal tender. It will be accepted for loans, payments and taxes. Twenty years after the country started accepting the US dollar, it is now a global experiment for what many Bitcoin maximalists hope will be its successor.

Salvadorians seem to be worried about the stability of the new currency, but many have already embraced it. Taxi driver Daniel Hercules explained:

I’ve accepted Bitcoin for about two months since I knew this was coming. I just had someone pay me $40 in Bitcoin for a fare to the airport but it’s rare. Only around 10% of customers prefer to pay with Bitcoin.

Of course Daniel knows that Bitcoin fluctuated in those two months, and that he’s on the lucky end. When he received his first Bitcoins, they were trading at around $30,000 for one full coin. By now, that’s $46,000 and it’s earned him a nice little profit. But Daniel realizes that the other side of the coin, a falling price, is also a possibility.

He stated:

It is one of the things that worries me the most. Losing money from long days of work would not be OK.

Advertentie.

Remittances

President Nayib Bukele claims that in a third world country like El Salvador is, the adoption of Bitcoin will help his countrymen save some $400 million which is spent annually on commissions for remittances, aka payments that Salvadorians around the world send home to their families, of which Western Union and likewise companies take a hefty commission.

By now, the media starts to understand why banks and other financial institutions are not too keen on letting Bitcoin grow any further in popularity. All those fat fees they earn could disappear overnight if El Salvador’s gamble proves successful.

Let’s revisit in a few months or so.