{"id":20222,"date":"2021-08-15T19:36:59","date_gmt":"2021-08-15T19:36:59","guid":{"rendered":"https:\/\/davidgerard.co.uk\/blockchain\/?p=20222"},"modified":"2021-08-16T18:45:01","modified_gmt":"2021-08-16T18:45:01","slug":"el-salvador-and-bitcoin-news-gossip-rumours-and-reading-the-tea-leaves","status":"publish","type":"post","link":"https:\/\/davidgerard.co.uk\/blockchain\/2021\/08\/15\/el-salvador-and-bitcoin-news-gossip-rumours-and-reading-the-tea-leaves\/","title":{"rendered":"El Salvador and Bitcoin: news, gossip, rumours and reading the tea leaves"},"content":{"rendered":"

El Salvador\u2019s Bitcoin Law<\/a> takes effect on 7 September! Is everything in place and ready? Of course it isn\u2019t.<\/p>\n

There\u2019s very little solid news. But the rumours and suppositions have been flying around. Here\u2019s some gossip and scuttlebutt, for what it\u2019s worth.<\/p>\n

 <\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

News<\/h3>\n

The Constitution is being changed at the end of the year. Bukele\u2019s main goal is to establish a longer Presidential term, and more relaxed term limits. One of the other changes is to nationalise the pension system. [ElSalvador.com<\/i><\/a>, in Spanish<\/i>] The government has even put up billboards advertising the pension nationalisation. [Twitter<\/i><\/a>]<\/p>\n

Pensions were managed by the government until 1998, but changed to a contribution system. There is over $12 billion in pension liabilities.<\/p>\n

Nationalising pensions\u00a0 is widely seen as a way for the government to get its hands on at least some of these actual dollars, and use the dollars to avoid defaulting on their sovereign debt.<\/p>\n

Those who can \u2014 e.g.<\/i>, Salvadorans who are US permanent residents \u2014 are getting their dollars out of El Salvador as quickly as possible.<\/p>\n

Bitcoin came up in discussion of the pension nationalisation, because they\u2019re both seen as a way for the government to get real dollars<\/a> to pay external debts. The real dollars can be substituted with fake dollars, such as unbacked Col\u00f3n-Dollars<\/a> in the Chivo system.<\/p>\n

Accepting Bitcoin will now be \u201ctotally and absolutely optional\u201d according to the Minister of Finance, Alejandro Zelaya (\u201ctotal y absolutamente opcional\u201d) \u2014 but Article 7 of the Bitcoin Law,<\/a> making acceptance of Bitcoin mandatory, is still in place.<\/p>\n

Zelaya says that they\u2019re about to announce the regulations implementing the Bitcoin Law \u2014 but there\u2019s no date on this. [ElSalvador.com<\/a>, in Spanish<\/i>]<\/p>\n

Eugenio Chicas, a former Secretary of Communications of the Presidency, has been loudly making trouble about Bitcoin, and distributing \u201cno Bitcoin\u201d stickers. Chicas’ “No Bitcoin” logo has been showing up in Salvadorans’ Twitter icons. [ElSalvador.com<\/a>, in Spanish; ElSalvador.com<\/a>, in Spanish<\/i>]<\/p>\n

No news<\/h3>\n

What\u2019s happening with the new Bitcoin ATMs? Lots of Bitcoin ATM companies have claimed to have the contract, or a contract [e.g., <\/i>Twitter<\/i><\/a>] \u2014 but there\u2019s nothing official, nothing in place as yet, and no news of further ATM deployments.<\/p>\n

The Asociaci\u00f3n Salvadore\u00f1a de Industriales (ASI), a business association, complains that they have no idea what\u2019s going on as yet and are having to guess what will happen. [ElSalvador.com<\/a>, in Spanish<\/i>]<\/p>\n

Rural farmers\u2019 markets have no idea about Bitcoin \u2014 a lot of the traders are illiterate, in fact \u2014 and no interest in accepting it. [ElFaro<\/a>, in English<\/i>]<\/p>\n

Nobody in the banks seems to have any idea how to proceed as yet \u2014 how to correctly handle and account for stored bitcoins whose dollar value is volatile, or whether or how to offer Bitcoin-denominated accounts.<\/p>\n

I searched ElSalvador.com for “bitcoin” for the past month. I found a small amount of news coverage, and a lot more articles saying what a dumb and bad idea this was and how nobody’s been told anything.<\/p>\n

Rumours<\/h3>\n

Strike has apparently been contacting large retail companies, offering them a solution so they can accept bitcoins. The Strike app would accept bitcoins, and Strike would deposit dollars in the business\u2019s account. The fees would be around 1% plus taxes.<\/p>\n

The companies in question are still worried about the volatility of Bitcoin, in case the price goes down significantly between accepting the bitcoins and the dollars being deposited.<\/p>\n

The government is apparently planning to use Bitso, a Mexican crypto exchange. This is \u201cunconfirmed\u201d even in the rumour. But Bitso tweeted in June that they were \u201cExtremely energized after our visit and work sessions with @nayibbukele\u2019s team.\u201d [Twitter<\/i><\/a>]<\/p>\n

What happens next?<\/h3>\n

The Ministry for Innovation does not have a good record for delivering new programmes on time. Some expect an announcement that the release of the Chivo Wallet payment system,<\/a> or the regulations implementing the Bitcoin Law, will be delayed to give time to banks, institutions and businesses. Which they are obviously in dire need of.<\/p>\n

Update:<\/strong> Congressman Numan Salgado confirms that the regulations will be published after<\/em> the Bitcoin Law goes into effect. [Twitter<\/em><\/a>]<\/p>\n

One commenter said: \u201cI can imagine how bad they’re gonna have it once the regulations are out and they get 1 sprint to make the changes.\u201d<\/p>\n

\"Become<\/a>

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El Salvador\u2019s Bitcoin Law takes effect on 7 September! Is everything in place and ready? Of course it isn\u2019t.<\/p>\n","protected":false},"author":1,"featured_media":20223,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[2405,2407,21,2406,2305,2404,2306],"class_list":["post-20222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorised","tag-alejandro-zelaya","tag-asociacion-salvadorena-de-industriales","tag-bitcoin","tag-bitso","tag-el-salvador","tag-eugenio-chicas","tag-strike"],"jetpack_featured_media_url":"https:\/\/davidgerard.co.uk\/blockchain\/wp-content\/uploads\/2021\/08\/eugenio-chicas-no-bitcoin.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/comments?post=20222"}],"version-history":[{"count":17,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20222\/revisions"}],"predecessor-version":[{"id":20240,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/posts\/20222\/revisions\/20240"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media\/20223"}],"wp:attachment":[{"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/media?parent=20222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/categories?post=20222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/davidgerard.co.uk\/blockchain\/wp-json\/wp\/v2\/tags?post=20222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}