El Salvador will become the first country that adopts Bitcoin as its legal tender in September. However, several warnings are coming from the economist over the risks such a move poses.
According to John Hopkins University findings, paying remittances with Bitcoin will be more costly than the usual traditional method. Also, another survey revealed that almost two-thirds of the El Salvador citizens might not want to receive Bitcoin as a form of payment.
Others Challenges Emerge
The Chainbytes CEO Eric Grill also revealed that relocating his manufacturing base to El Salvador has faced severe problems in sourcing parts. But then experts in geothermal energy in El Salvador say that Bukele’s plans to strengthen energy-intensive Bitcoin mining operations from El Salvador’s volcanoes are highly optimistic.
The country adopted US dollars in 2001. Now, it says that the citizens should exchange it freely with Bitcoin. It also proposed up to a $150 million fund to make sure that it is easily converted. But with all that is going on, critics are saying that the fund is not enough.
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According to them, it could make way for illegal operatives to convert Bitcoin since Bitcoin has increased value. This market prides itself on maintaining anonymous transactions to US dollars through a National bank, thus; laundering their profits.
But the greatest concern over the BTC gamble introduction is that it comes without any financial safety net for the citizens against the high-volatile crypto markets.
Bitcoin Gambling Becomes An Issue
According to Daniel Munevar, an economist from Colombia, the bitcoin law in El Salvador gambles with 2 public purses. One is El Salvador’s government, while the other is the IMF purse.
BTC is trading upwards and above the $50k mark | Source: BTCUSD on TradingView.com
He says that an American can gamble his hard-earned cheque on cryptocurrency with the expectation of higher earnings. However, this latest gamble is Yolo “you only live once.” Investment at a national level.
But some El Zonte locals are building their investment strategies. For instance, Dominga Peña, a local who sells flavored shaved ice with fruit syrups on El Zonte beach. He stated that if one in ten customers can pay with BTC, she can keep several for small purchases spending funds.
Dominga Peña also insists that her mentality changed after hearing the explanations from the Bitcoin Beach people.
They explained everything you need to know regarding the advantages and disadvantages of taking crypto payments. Finally, however, she confessed that she would not invest excessive money in Bitcoin, especially since the price has been fluctuating recently.
Featured image from Pixabay, chart from TradingView.com