El Salvador professionals call for repeal of Bitcoin Law

In a statement released on June 25, a group of Salvadoran professionals, academics and researchers called for the repeal of the Bitcoin Law, considering that it does not fulfill the basic functions of money due to its volatility.

Writing, backed by the names of over 80 people, it was posted on Twitter by Ricardo Castaneda Ancheta, a Salvadoran economist who works as a professional in his area at the Central American Institute of Fiscal Studies.

In the text a series of observations are made that question the new Lawsanctioned on June 9, to then present a list of warnings about the possible repercussions of having bitcoin (BTC) as legal tender in El Salvador.

Among the questions it is said that the government you should not take the risk of ensuring the convertibility of the cryptocurrency, which they assume will be financed by the collection of taxes. They refer to the USD 150 million trust fund to be administered by the Development Bank, which was recently announced by President Nayib Bukele.

They also point to the environmental risks of turning the country into a center for cryptocurrency mining, even though the project proposed so far raises the use of renewable energy from volcanoes (geothermal generation).

Signatory they repeat one of the ideas often handled by bitcoin detractors, noting that El Salvador could become a tax haven and a center for money laundering. It is further believed that the cryptocurrency would open the way to the commission of financial crimes, tax evasion, ransomware, and the formation of speculative bubbles.

In that sense, they mention the positions against Bitcoin that have taken some Nobel Prize winners in Economics and researchers internationally. They even quote the Bank for International Settlements (BIS) that has openly expressed its rejection of cryptocurrencies, calling for the creation of central bank digital currencies.

On this basis, professionals they want to prevent a “bitcoinization” of the economy, argued that the Central Reserve Bank will not be able to track transactions on the blockchain. Consequently, they invite the country’s professionals to join the list of signatories calling for the repeal of the Bitcoin Law.

Twitterers with mixed reactions

The responses to Castaneda’s tweet were not long in coming and the reactions a split among Salvadorans in opinion on the issue of bitcoin.

In that sense, while some demonstrated in support of the communiqué and even called to initiate protests against the Law, others criticized the content of the text and they questioned the credibility of the signatories.

In this regard, the twitter user identified as @DanyAlos comment: “How much fear and ignorance can be read in these lines! It reminds me of those who also advocated banning the Internet in their early years of mass adoption for the same reasons that oppose Bitcoin today.”

Something similar tweeted @Anti_Pesosfor those who find it difficult to assume that academics are right when talking about disruptive technologies. “Economics Nobel Laureate Paul Krugman saw no value of the Internet in the economy in 1998, nor did he see it in Bitcoin,” he wrote.

Opponents of Bukele are the ones who reject bitcoin the most

In general, Salvadoran professionals who support the statement think that the use of a cryptocurrency such as bitcoin, in a dollarized economy like that of El Salvador, it could be trouble.

Salvadorans fear that bitcoin may affect the handling of the dollar. Source: tombark / pixabay.com

The signatories express their fears that the country’s systemic risks will multiply, and that bitcoin will succeed in “undermining macroeconomic stability, reducing real household income and deteriorating the well-being of the entire population.”

All these arguments against the Bitcoin Law have already been put forward by other sectors of El Salvador, and they come mainly from opponents of Bukele’s government.

As CriptoNoticias reported a few days ago, deputies Anabel Belloso and Dina Argueta, of the Parliamentary Group Frente Farabundo Martí para la Liberación Nacional (FMLN), requested reform of the Law against the laundering of money and other assets. They propose that exchanges be required to report all transactions exceeding the equivalent of USD 10 thousand.

Prior to this, the same deputies they presented to the Legislative Assembly a reform proposal to eliminate bitcoin as legal currency.

Like the professionals who signed the statement of this June 25, the parliamentarians consider that the adoption of cryptocurrency endangers the economy and family finances. They all reject the fact that it has been adopted hastily, “without technical study and without parliamentary debate”.

However, Belloso y Argueta’s request to repeal the Law it did not have the support of deputies in the Legislative Assembly.

Congressman Numan Salgado, of the Gana party, an ally of the ruling party, commented that the opponents were asking for changes or repeal because they seek to generate uncertainty and fear among the citizens of El Salvador.

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