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El Salvador abandons Bitcoin as legal tender

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Re: El Salvador abandons Bitcoin as legal tender

#91

Post by ggm »

jaggederest wrote: post #87
Terr_ wrote: post #75

Earlier quoted context omitted.

> sovereign wealth fund That reminds me of Hong Kong, where I used to live and which maintains a large sovereign wealth fund to ensure its currency is pegged to the US dollar. While various US think tanks ranked it well on their checklists of "economic freedom", they tended to gloss over the rest of the recipe that made it work. Not just the huge sovereign wealth fund, but also how half the housing is government-run…

> you don't really own land, you just rent it for a very long term from the government. This is probably economically a good idea, absent something like georgist land taxes. It eliminates some or all of the incentive to speculate in land, which is of course the whole problem El Salvador ran into with bitcoin as currency.

It hasn't entirely stopped rents in HK being untenably high, for many people. It has rent controls, but the system permits some very untenable outcomes which if left unchecked would re-create Kowloon Walled City.

So whilst politically I agree, practically I am unsure there is no land speculation: A waterfront view remains valuable in and of itself, no matter what.

Re: El Salvador abandons Bitcoin as legal tender

#92

Post by georgeecollins »

josu wrote: post #37

Here is the retained purchasing power of each of the coins since the law was passed in September 2021: Legal tender 1: -15% Legal tender 2: +115% Guess which one has been deemed a "Failed experiment".

If the value of the dollar increased or stayed 100% stable we would be in a depression. In fact, the only time the dollar increased in value for long was the great depression.

The point of legal tender is that it reduces in value slowly over time, so you don't just hoard it under your bed. If someone paid me in BTC, I wouldn't spend it, I would hang on to it. That's not how currency works. Currency is the thing you want to spend, not hand on to.

Re: El Salvador abandons Bitcoin as legal tender

#93

Post by wyager »

twothreeone wrote: post #45

I don't particularly like BTC (as it senselessly burns huge amounts of energy, thereby actively contributing to the destruction of our biosphere), but this news post is intentionally misleading. As reported by many other outlets (e.g. [1,2]), El Salvador abandons BTC to qualify for an IMF loan - so the IMF is pressuring them towards this move (presumably for political reasons). [1] https://finance.yahoo.com/news/el-s…

The resource usage is not senseless; it's the core aspect of Bitcoin that makes its security model so trustworthy.

Re: El Salvador abandons Bitcoin as legal tender

#94

Post by wyck »

rounce wrote: post #30
wyck wrote: post #8

They have made just over 300 Million off the initial BTC purchase, and as of 15 minutes ago, continue to buy BTC everyday. They even have their own tracker, https://bitcoin.gob.sv/

Seems a bit dodgy to refer to state assets as if they were the personal possessions of Bukele in the way which that site does.

I pasted the wrong link, corrected the above with .gov.sv domain .

Re: El Salvador abandons Bitcoin as legal tender

#95

Post by daedrdev »

desumeku wrote: post #36
cwillu wrote: post #31

Earlier quoted context omitted.

“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.” -- https://reason.com/2025/02/03/el-salvador-walks-back-its-bit... Sounds pretty failed to me.

They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.

The IMF probably rightfully sees a structurally deflationary currency (bitcoin) as a massive risk should it gain widespread adoption

Re: El Salvador abandons Bitcoin as legal tender

#96

Post by Mengkudulangsat »

hackernudes wrote: post #78
Mengkudulangsat wrote: post #63

Earlier quoted context omitted.

Fair demand by the IMF. Presumably they require their loan to be repaid in fiat because of their internal charter. If Bitcoin adoption eventually removes El Salvador's ability to issue fiat, their loan can't be repaid.

El Salvador doesn't have a fiat currency. They are dollarized since 2001.

Hmm.. I didn't know that. Which makes the demand purely political then. I recall IMF making the same demand from an island country a few years ago too.

https://www.imf.org/en/Blogs/Articles/2021/07/26/blog-crypto...

Re: El Salvador abandons Bitcoin as legal tender

#97

Post by wyager »

ks2048 wrote: post #33

Do pro-bitcoin people still talk about goals of bitcoin being a currency that people use daily? I don't follow it closely, but that idea seems to have faded and now it's just an asset to buy and hold while it magically goes up forever.

I think people mostly realized that the more immediate priority is establishing Bitcoin as an international reserve commodity. Its usage as a currency, either directly or via intermediary layers, is kind of secondary to that. Bitcoin is making pretty good progress in that regard.

Re: El Salvador abandons Bitcoin as legal tender

#98

Post by wyck »

desumeku wrote: post #72
lern_too_spel wrote: post #60

Earlier quoted context omitted.

I'd be surprised if DPRK doesn't already have access to the wallet and is just waiting to get the most out of it.

I highly doubt their BTC reserve is connected to the internet.

It's likely in cold storage , but the tracker is using the wallet address.

For example, about 1 hour ago they bought 1m in BTC: https://bitcoin.gob.sv/tx/83ddfe67485d322e9c017d8ba6aee53d8f...

The address is : 32ixEdVJWo3kmvJGMTZq5jAQVZZeuwnqzo

Re: El Salvador abandons Bitcoin as legal tender

#99

Post by antihipocrat »

p_j_w wrote: post #51
ptero wrote: post #17

That's heavy editorializing: El Salvador keeps buying the Bitcoin for its strategic reserve. Businesses and citizens can keep using it. But for getting an IMF loan, IMF (which, to put it mildly, doesn't like Bitcoin) required the end to Bitcoin legal tender status. Now the businesses are free to accept it or not instead of being required to accept it. That's all. The government plans to keep buying and using it.

>Now the businesses are free to accept it or not instead of being required to accept it. That's all. Right, so it's no longer legal tender.

Legal tender does not have to be a mandatory means of exchange.

Re: El Salvador abandons Bitcoin as legal tender

#100

Post by the_af »

yreg wrote: post #84
the_af wrote: post #27

Earlier quoted context omitted.

From the article: > Salvadorans, with the exception of a few, never embraced Bukele’s initiative, who enjoys enormous popularity for his war against gangs, which dropped homicides to historic lows in El Salvador. A recent survey by the Central American University (UCA) revealed that 92% of Salvadorans did not use bitcoin in their transactions in 2024. I would say this points to an actual failed experiment, if true.

8% is quite a lot though.

Depends for what. What were Bukele's stated goals? Only with this in mind can we decide whether 8% is high or low.
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