On June 24, El Salvador's President Nayib Bukele addressed the nation about his plan for a bitcoin legal tender. Secretaria de Prensa de La Presidencia/Handout via Reuters
El Salvador's Bitcoin law will be in effect on September 7.
The law was revealed at a Miami convention in June 5th and will transform El Salvador's economy.
However, the chaotic rollout was marred by protests from local communities, outcry worldwide, and general confusion.
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El Salvador's bold attempt to make bitcoin the official currency of its country has been realized in three months. The bitcoin legal tender law will be in effect on Tuesday. The real experiment will then begin.
This law was revealed at a Miami convention in June 5. It will transform El Salvador's economy. Nearly a quarter of the country's GDP came from remittances by 2020. It will have a significant impact on local business and global investment as well as daily life for Salvadorans.
It was approved by Congress three days after it was announced, with only a few hours of discussion.
The process of preparing and implementing the law was complicated. Salvadorans claim they don't know what the law means for them and have received very little communication from officials. The law could affect global finance, from rating agencies to big banks, hurt local insurers and weaken the bitcoin network.
Opposition has grown as the law's implementation date, which some refer to "B-day", approaches. As pensioners worried that their payments could be denominated using the volatile crypto-asset, protests broke out in San Salvador.
Others protestors said that the law could increase money laundering in a country with high levels of corruption. Protests also seem to reflect a wider public sentiment. In July, 75% of Salvadorans expressed reservations about the law. Half of those polled said they didn't know anything about the law.
Although the government is still working on rules to govern bitcoin's adoption, they have yet to finalize them. The original bill, which was revealed via President Nayib Bukel's prolific Twitter account, will require bitcoin acceptance by businesses. However, it contains a potentially huge exemption for those businesses who don't have the necessary technological know-how.
Bukele has brushed all of this aside and has reacted to the law's critics. The 40-year-old president decried the opposition as "clumsy" and said they were "liars". This will be exposed once the law goes into effect. Bukele assures Salvadorans that they can continue to trade in dollars, despite concerns about their pensions or businesses. He says that Bitcoin use is not mandatory.
Some aspects of the president's rollout seem to be coming together. The government, along with Strike, an American bitcoin company, has established hundreds of bitcoin ATMs in order to use a new digital wallet called Chivo. Chivo is Spanish for "cool". The central bank is launching TV informationmercials to educate the public. The central bank also published preliminary banking rules in August governing bitcoin's move.
Banks have one day to comment on the new regulations, which will be effective Monday.
There is also a catch with ATMs. Bukele touts bitcoin as a way to avoid expensive fees at Western Union and remittance companies. However, ATMs may charge withdrawal fees. An Economist journalist from San Salvador used one that charged 5%.
Many crypto enthusiasts still support Bukele. Mario Gomez Lozada (CEO of crypto trading platform PowerTrade) said that bitcoin was bringing hope and security to El Salvador.
Remittance fees are killing so many people. Gomez Lozada said that Bitcoin is a cost-free way to send money home. "I believe all countries in Latin America will follow the example of Paraguay and Argentina.
He said, "I never imagined that I would see my country filled with such hope for the future. Let alone lead the way for others."
