According to President Bukele, giving bitcoin a legal tender in the country aims to generate jobs and also “give financial inclusion to thousands of people outside the formal economy”. According to Bukele, "70% of the Salvadoran population does not have a bank account and works in the informal economy."
In El Salvador's dollarized economy, remittances sent by Salvadorans from abroad are equivalent to 22% of the Gross Domestic Product (GDP).
In 2020, remittances totaled US$5.918 billion, an increase of 4.8% compared to 2019, according to official data.
What is the consequence of not using bitcoin?
In the text of the law there is no penalty for those who do not comply with the obligation to accept bitcoin, so this left doubts about the topic in some bitcoiners. In response to Cointimes, the El Salvador Transparency Portal stated that there is no legislation that punishes those who do not use bitcoin.
“The point is not legislated, if you refuse to accept the official currency, whatever it is, you will not be able to purchase any kind of good or service,” said the El Salvador agency.
All over the world, what legal tender gives money is the obligation on the legal system to recognize any monetary debt as satisfactory payment. That is, bitcoin becoming legal tender gives it the power to extinguish debt when offered. The creditor is under no obligation to accept the proposed payment, but the act of presenting the payment in legal tender extinguishes the debt.
In Brazil, digital currency is not yet recognized by the Central Bank, with no corresponding backing, given the lack of correspondence to a physical existence in equivalent paper currency, as well as the impossibility of proving its effective value, according to what is stated. in Bacen Communiqué No. 31.379/2011.
Not using Bitcoin in Brazil can make you lose money with the devaluation of the national currency against the BTC. In El Salvador, not having bitcoins leaves you out of the country's payment system, but without any punishment.
Article written in collaboration with Bruno Haacke.