El Salvador Abandons Bitcoin as Legal Tender After Failed Experiment – The Tico Times
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Excerpt:
Bitcoin was never used by most Salvadorans, its modern city was never built, and now it will cease to be legal tender in El Salvador, the first country in the world to adopt it in 2021: a complete failed economic bet by President Nayib Bukele. Congress, dominated by the ruling party, approved last Wednesday a confusing reform to the Bitcoin Law at the request of Bukele’s government, which had no other option to receive the $1.4 billion credit agreed in December with the International Monetary Fund (IMF).
The reform eliminated the word “currency” when referring to bitcoin, but says it is “legal tender.” Despite the lack of clarity, it lifts, as required by the IMF, the obligation to accept it in transactions or debt payments, a key condition for it to be “legal tender,” according to economic analysts. With the change, “if someone owes you money and wants to pay you in bitcoin, you can refuse to be paid in bitcoin, but you cannot refuse if it’s legal tender,” economist Carlos Acevedo explained.
The use of bitcoin in El Salvador’s dollarized economy, according to the new rule, will be optional and will be at the discretion of the private sector to accept cryptocurrency payments for goods and services. Businesses are no longer required to convert dollar prices into this cryptocurrency. “Bitcoin no longer has that force of legal tender. That’s how it should have always remained, but the government wanted to force it and it didn’t work,” economist Rafael Lemus said.
