This news has caused much excitement in the South American country as it hopes to pioneer the way for other countries to adopt the same stance. However, there is still a degree of uncertainty from businesses who now obliged to accept this form of payment rather the normal US dollar.
The reason for this uncertainty is due to the volatility of cryptocurrency, as the rate fluctuates with the market with one Bitcoin being worth $63,000 in September of last year to $30,000 in July, this fluctuation is causing concerns for many business owners. While they have the potential to earn more as the price of Bitcoin increases, there is also the risk of losing money.
Fast forward 24 hours, following a crash in the market and technological issues, El Salvador citizens can be seen protesting.
Big name companies such as Apple not giving users the option to own Chivo, the government-back digital wallet, there was also issues with the high influx of registrations, causing systems to crash.
On the flip side, the government has now offered $30 worth of Bitcoin to citizens who take up the wallet and begin to use bitcoin as a legal tender, with food chains such as Starbucks accepting the currency.
While the use of Bitcoin is still in its early days for El Salvador, it is hard not to consider the long-term implications such as underhand transactions due to the lack of laws in place. Though using cryptocurrency is a way forward for financial spending, only time will tell if El Salvador are successful guinea pigs.
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