The most famous cryptocurrency in the world reaches the goal of “monetization”. El Salvador gives it the status of legal tender in the country. All companies will have to accept it as a form of payment, along with the US dollar.
The transformation of a cryptocurrency into official currency is not materially possible in Europe and in other countries of the world that do not unilaterally decide to create a market for it..
El Salvador will not be able to regulate imports in bitcoins, for example, nor will it be able to demand bitcoins as payment for any goods exported. There can be no reserves of bitcoins, nor a central bank issuing them.
It is not clear and the mechanism of issuance is not known: from which computer devices will the so-called “mining”, ie the creation of currencies, take place? Will the state do it through the central bank? In fact, in El Salvador there is no obligation to accept cryptocurrency, and this already reveals the first contradiction.
The Salvadoran economy is certainly not known as one of the most prosperous in the world, nor is its financial market stable and transparent. Just as the anti-money laundering legislation is almost non-existent.
The digital currencies of central banks
Each adult citizen who joins the government project will receive an “airdrop” worth $ 30 in bitcoin. The app to use is called “Chivo”, and it won’t use any mobile data, which means users won’t have to pay for a cellular plan. The future will tell us that we will find a usefulness for these tools, while, (the ECB has also begun) the production of “digital” currencies, that is official ones transformed into intangible portfolios. The purchasing power and all the guarantees for the euro will remain, but with the digital one it will dematerialize, for those who want it. Given that the ECB has repeatedly repeated that cash cannot be abolished.
A Central American University survey cited by broadcaster BBC revealed that just 4.8% of 1,281 respondents were aware of what bitcoin was and how it worked, while a 68% share took sides against the “legalization” of cryptocurrency. Faced with these data, who will need this initiative. We await developments, but the European legislator must now run a little faster.