Protesters calling themselves the Popular Resistance and Rebellion Bloc have come out against the government of El Salvador for passing a law making bitcoin legal tender.
A Tuesday tweet from local news outlet El Mundo shows El Salvadorans hold banners saying “no bitcoin” in the streets of San Salvador demanding the repeal of the country’s bitcoin law. Members of the Legislative Assembly Anabel Beloso and Dina Arguetta address protesters after meeting a group separated by a razor wire barrier for the first time.
— Dario El Mundo (@ElMundoSV) 20 July 2021
In a letter made available in protest, the Popular Resistance and Rebellion Bloc group claimed that President Nayib Bukele passed a law making cryptocurrency legal tender in the country without due consultation with the public. It also cited the volatility of bitcoin (BTC), comparing investing in the cryptocurrency to playing the lottery: “Betting on the lottery is a voluntary act, whereas bitcoin is required by law.”
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However, the group’s main complaint around the bitcoin legal framework centered around a perceived disparity in the use of the cryptocurrency by the government, when compared with the average resident in El Salvador. The protesters said that bitcoin “serves only a few big businessmen, especially those associated with the government, to launder erroneously earned money.”
“Entrepreneurs who put their capital in bitcoin will not pay taxes on their earnings,” the letter said. “Also, implementing bitcoin will cost the government millions of dollars in taxes paid by the people.”
“Bitcoin will facilitate public corruption and operation of drug, arms and human traffickers, extortionists and tax evaders. It will also create monetary chaos. It will affect people’s wages, pensions and savings, ruining many MSMEs. will affect low-income families and affect the middle class.”
Although passed by the government of El Salvador and signed into law by Bukele in June, the law recognizing bitcoin as a legal currency in the country would not take effect until September 7. The object of the Popular Resistance and Rebellion Bloc’s protests was to demand the government officials repeal the law. Furthermore, the World Bank has also refused to help El Salvador transition to a bitcoin-friendly framework, citing “lack of environmental and transparency”.
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During a scheduled visit to the US State Department earlier this month, Under Secretary of State for Political Affairs Victoria Nuland suggested to El Salvador that bitcoin is well regulated and transparent, but clearly not in line with the country’s more digital economy. Did not say anything against the move. Some proponents of the law, including Bukele, have suggested that bitcoin could help facilitate remittance payments from El Salvador citizens living abroad and reduce the country’s reliance on the US dollar.