Hayek, the Nobel Prize-winning economist, called “choice in currency,” I welcomed any nation’s attempt to let bitcoin compete on a level playing field with its existing, official money.
dollar, El Salvador’s official currency since 2001, the law’s seventh article says, “Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.” In other words, bitcoin is to be not just a legal tender in El Salvador but a compulsory one.
should we not let people use freely what money they want to use? …
Despite what many people think, deeming some kinds of money “legal tender” typically means nothing more than, so far as the courts are concerned, a debtor can use, say, U.
Compulsory or “forced” tender laws, like Article 7, obliging everyone to accept certain types of money for any payment whatsoever, are another kettle of fish.
As its practical implication has typically been to force producers to part with all their produce for paper, it can also be a severe violation of property rights.
Every “credit only” business does so legal tender for paying dollar debts, the U.S.
They note, first of all, the Bitcoin Law’s Article 12 exempts “those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin” from it.
In effect, the Casa de Cambio will serve as one big stockjobber, taking the opposite side of Salvadoran’s bitcoin bets – a risky business because a bullish bitcoin market may see relatively few bitcoin conversions whereas a bearish one, like this week’s, could see many more.
Complaints have already forced El Salvador President Nayib Bukele to back away from his plan to have the government pay its own workers in bitcoin.
The response to a recent survey taken by El Salvador’s Chamber of Commerce shows, furthermore, that over 92% of all those surveyed, and 94% of participating entrepreneurs, would rather nor have to accept it.
Making bitcoin acceptance costless, supplying the necessary infrastructure, technology and training, and simply allowing Salvadorans to use it without penalizing them, through capital gains taxes or otherwise, for doing so ought to suffice to eventually “bitcoinize” El Salvador.
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