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A majority of El Salvador citizens doubtful of Bitcoin as legal tender

  • The majority of Salvadorians are sceptical about Bitcoin becoming a legal tender according to a poll.
  • The survey disclosed that 65 percent of Salvadorians are not willing to accept payment in Bitcoin.

El Salvador recently became the first country to legally recognize Bitcoin as a parallel legal tender after 62 out of 84 lawmakers voted for the proposal drafted by the president, Nayib Bukele. Though this move created a positive sentiment among crypto enthusiasts, three-quarters of Salvadorians remain sceptical as disclosed by a recent poll. 

According to Pollster Disruptiva, an affiliate with Francisco Gavidia University, 54 percent of the respondents are strictly against the move, stating Bitcoin adoption is “Not at all correct.” In addition, 24 percent also found the Bitcoin adoption decision as “only a little correct” while close to 20 percent gave a thumbs up to the Bitcoin acceptance law. 

The poll interestingly disclosed that a lot of Salvadorians are little exposed to crypto. It was reported that 46 percent of Salvadorians have no idea of Bitcoin while close to 65 percent are not open to receiving payment in Bitcoin. 

When presenting the survey results, Oscar Picardo, head of Disruptiva’s institute of science, technology, and innovation expressed concerns about the underlying plan to make the country a Bitcoin hub and a leading proponent of technological advancement. 

This is a risky bet on digital transformation.

The survey had a sample size of 1233 people selected in El Salvador and had a margin of error of about 2.8 percent. 

Experts’ concerns about the Bitcoin adoption move by El Salvador

El Salvador’s Finance minister Alejandro Zelaya, soon after the country adopted Bitcoin stated that the IMF is in support of their Bitcoin implementation. 

The IMF later revealed that they spotted macroeconomic, legal, and financial issues with the adoption. Zelaya also disclosed that they will consult the World Bank for technical assistance on rolling out the digital asset as an official method of payment. However, the World Bank cited environmental and transparency concerns as the reason they cannot support the country. 

We are committed to helping El Salvador in numerous ways including currency transparency and regulatory processes. While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.

Several experts also found the Bitcoin adoption as “not workable”. Alistair Milne, who teaches financial economics at the School of Business and Economics at the Loughborough University in the UK stated that the decision does not force anyone to accept Bitcoin as an exchange for goods and services, and does not also change the situation. 

Related: El Salvador’s president is “stupid” for adopting Bitcoin as legal tender: Renowned economist Steve Hanke

According to Milne, the legal tender status of Bitcoin could mean the digital asset would be used in tax payments and court-ordered payments. However, since debts will definitely be in the Salvadoran dollar, and the court will have to state the relevant exchange rate, there could be issues in framing the law. 

El Salvador has recently hinted that they will add Bitcoin to the balance sheet of its central bank, or use it as a treasury reserve asset.

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