[HN Gopher] El Salvador to adopt Bitcoin as legal tender ___________________________________________________________________ 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. ___________________________________________________________________ (page generated 2021-06-05 23:00 UTC)