The IMF yesterday name they have reached a $1.4 billion loan deal with El Salvador. In return, the Central American country that legalized bitcoin in 2021 was forced to withdraw some of its pro-Bitcoin policies.
I spent about three months in El Salvador around the time the Bitcoin law came into effect. I thought then that it was a positive development for the country, but there were aspects of the law that I did not like very much. Of course these aspects are now being removed.
More importantly, Salvadoran merchants will no longer be required to accept bitcoin. Great! I don't think Bitcoin should be forced on anyone, and I don't believe Bitcoin needs that. Bitcoin is a form of free market currency, and should be accepted voluntarily.
(In practice, this aspect of the law was barely enforced anyway. I've heard from a relative defendant that some of the fast food chains got a phone call from the government asking them to comply – which would explain why McDonald's and Wendy's did it. – but otherwise I don't think any merchants were in trouble for not accepting bitcoin.)
In addition, El Salvador must terminate the operation of its Chivo wallet. The software may have improved over the years, but in 2021 the wallet was incredibly buggy; the open source community and the free market are much more capable of building such tools. Good morning!
That said, it's a little disappointing that Salvadoran citizens will no longer be able to pay tax in bitcoin – though, again, I doubt many did. This may be little more than a concern, however. Now, merchants who accept bitcoin must sell some of their BTC for USD before paying the taxman.
To succeed, Bitcoin benefits from a level playing field. El Salvador still goes a long way to offer just that.
This article is a Take. The views expressed are entirely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
