CEFI Stockholm Syndrome
The first shot across the bow has come. El Salvador could (subject to their congress) embrace bitcoin as legal tender. What better place to experiment with BTC but in a small dollarized country?
The usual suspects make their views known. The IMF is worried. Central banks are skeptical. My RSS feed fills with negative BTC news articles. The illiquidity of BTC. The criminal uses of bitcoin.
It is the end of the world — again.
More FUD … the FBI has ‘somehow’ hacked the hackers and taken their bitcoin! Heck, even Elon Musk is less sure about bitcoin.
The motivation is simple : Property and it’s safekeeping are the foundations of wealth creation. Good government should protect property. (I think this is becoming less true world wide but I digress. )
Nayib Bukele wants people to be able to remit money (their property) to El Salvador more easily. He is correct that wiring money to places like his own are too costly, too complex and possibly corrupt.
If there is any great criminality in money movements it is in the wire business and not in bitcoin.
Direct bitcoin transfers are unstoppable, efficient and kleptocracy immune.
Sure, arguing that BTC has too little functionality as a currency has some merit. El Salvador remains dollarized.
But there is also RSK.
RSK allows many Ethereum developed smart contracts to manage things in rBTC. El Salvador citizens may want to experience the fast growing ecosystem of DeFi . The news may trigger many more ETH to RSK protocol transfers.
Maybe you don’t know how to configure your wallet for different RPCs (other blockchains/layer2s)?
Go check out the ever growing list at https://chainlist.org/
I believe crypto or BTC as legal tender will have positive externalities on El Salvador. I expect other small dollarized countries to follow suit.
Will El Salvador become the new crypto Monaco?