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El Salvador’s bitcoin rollout is a hopelessly ambitious, hugely unpopular economic disaster waiting to happen

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This week, the Central American country became the first sovereign country in the world to adopt bitcoin as legal tender, rolling out a specially designed app called Chivo to assist in transactions. Cryptocurrency advocates, financial institutions and academics around the world will undoubtedly be paying attention to how this plays out – and for good reason.

President Nayib Bukele, a so-called right-wing “populist,” has argued that the adoption of bitcoin will help the country avoid costly fees from remittances from abroad, which totals nearly a quarter of the country’s GDP. This is significant for a country as impoverished as El Salvador, especially considering San Salvador is on pace to need another loan from the International Monetary Fund (IMF) soon.

According to the legislation, “The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” also including that the exchange rate “will be freely established by the........

© RT.com

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