El Salvador Bitcoin payment option

[Mpamaegbu]

Quite alright, the El Salvadorian approach to embrace Bitcoin is a welcome development but the mandatory angle to it is what doesn't go down well with me. I have read a few others here condemn that too. I will continue to maintain that Bitcoin can't completely exist or achieve mass adoption without the existence of fiat. The reason being that (1) – Bitcoin isn't something that is easily understood and as a result it's going to be a whole lot of problems for the illiterate and old folks. (2) Another factor is the Internet which Bitcoin requires to stay afloat. A lot of old forks don't understand the internet. So, are we going to cut the old folks out of the economic development? Certainly not. A best bet would be for the El Salvadorian government to compromise a little on its mandatory status and allow businesses to run on both Bitcoin and fiat simultaneously. Gradually, the citizens will be more enlightened and then effortlessly make the switch by themselves. To be honest with you, making Bitcoin a legal tender in El Salvador is more of a win for that country than it's for Bitcoin. Before now, I can bet that half of those who know about El Salvador now didn't even know a country like that existed.

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[Darker45]

The second and third paragraph says, "People will be able to download an application to receive payments or gifts in #bitcoin or DOLLARS." "If they want they will download it and if they don't want to, no." respectively.

It doesn't say anything about companies, so allow me to keep my doubts (but I'm also open to getting fully corrected if it's the case).
However, I am no longer 100% sure which is the correct way to understand how this legal tender thing is supposed to work there (I thought it works in a way, I then though it works the other way, now I'm no longer 100% sure in either direction)
If I get convinced in the other direction I will correct or remove that post. But for now, I'm not.

I, too, am not really sure of what the law really intends to enforce. There is that Article 7 which says, "Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service." And yet there is also that Article 12 which says, "Those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin are excluded from the obligation expressed in Art. 7 of this law."^[1]

There is no explicit mention of companies but the country's finance minister, Alejandro Zelaya, has also said that there are no sanctions to businesses that do not accept Bitcoin.^[2]

I may be wrong in my interpretation but I am assuming that when the president's spokesman, Ernesto Sanabria, and even the president himself, says, without qualification, that Bitcoin is not mandatory or that it is "totally optional," it means it is optional both to individuals and business entities.^[3][4]

Of course, I could be wrong.

[1] https://freopp.org/el-salvadors-bitcoin-law-full-proposed-english-text-9a2153ad1d19
[2] https://finance.yahoo.com/news/el-salvador-not-require-bitcoin-175818038.html
[3] https://www.coindesk.com/markets/2021/08/23/el-salvador-will-not-require-bitcoin-acceptance-president-bukele-confirms/
[4] https://www.coindesk.com/markets/2021/08/18/bitcoin-use-will-be-totally-optional-in-el-salvador-finance-minister-says/

[stompix]

There is no explicit mention of companies but the country's finance minister, Alejandro Zelaya, has also said that there are no sanctions to businesses that do not accept Bitcoin.^[2]

From the article you've quoted:

Bukele did not refer to Article 7 of the Bitcoin Law, which stipulates that all economic agents must accept bitcoin as a form of payment when offered by the person acquiring goods or services.
Ernesto Sanabria, a spokesman for Bukele, told CoinDesk that “the president has been clear in saying that the use of bitcoin is not mandatory.”
Asked about a possible change to Article 7, Sanabria said he had already addressed the issue in his response. He did not specify whether the article will be eliminated or otherwise modified.

Besides, that was August.
The news from Salvador now is:

One day after Bitcoin is legal tender in El Salvador, the legal adviser to the presidency, Javier Argueta, confirmed in the morning interview of Frente a Frente, that it will be an obligation for businesses to receive Bitcoin as a form of payment and It will also be an obligation to have the virtual wallet to carry it out. Otherwise, businesses are exposed to referrals of infractions to the Consumer Protection Law.

Now that's pretty interesting!  I wonder how much real estate costs in the lower-crime sections of El Salvador and how well one could live if, let's say, they had multiple accounts participating in bounties or signature campaigns.  That would be an interesting way to live if you wanted to live on the edge, don't you think?

Definitely interesting,but no, thank you!
$130k for an apartment of 90mp2 in what googles tells me is a safe zone in El Salvador doesn't sound like a bargain to me.

According to the Latin American classifieds portal Encuentra 24, the median price in San Salvador reached $113 a square foot in June — a 28 percent increase from March 2020, when the median hit a low of $88 a square foot.

Sounds on par with the medium zones from Eastern Europe.

[AicecreaME]

El Salvador Bitcoin payment option mandatory but people can decide to accept fiat

What some people do not like about El Salvadorian government move is that they made bitcoin a legal tender, that it should have just been a legal form of payment instead of making it a legal tender. In El Salvador, anything government make a legal tender can be used as payment of goods and services while marchants and other dealers must accept it as a form of payment. But when I read news today, I later knew that Bitcoin payment is mandatory but yet optional, the payment can be in Bitcoin but marchants can decide to either accept Bitcoin or fiat, the transaction will be processed automatically in accordance to what chooses by the recipient.

https://m.elsalvador.com/noticias/negocios/bitcoin-criptomonedas/876042/2021/?utm_source=twitter&utm_medium=deportes%20&utm_campaign=organico&fbclid=undefined

Government: it will be mandatory to receive Bitcoin and businesses are exposed to infractions of consumer law
According to the legal advisor to the presidency, Javier Argueta, it will also be mandatory to have the virtual wallet and once it is, the business is obliged to receive the cryptocurrency as a form of payment.

“You, having the electronic wallet, must accept the transaction.  The ‘shall’ is the transaction obligation… you are required to have the electronic wallet.  What is mandatory is the transaction, ”said Argueta, explaining the validity of the Bitcoin Law, which formally begins as of this September 7.

 The journalist Federico Zeledón asked him about the virtual wallet: _For the sake of clarity, then, what I am obliged to do is to have the electronic wallet?  To which Argueta replied: "To have the electronic wallet," he affirmed, to later explain that with it the costs are negligible and that the state's Chivo Wallet wallet is free.

Later he said that when making the transaction, then the businessman will be able to decide whether to accept his payment in Bitcoin or in dollars and again, in a play on words, he gave an example: “If I buy you 1,000 shirts that cost $ 200 and I'm going to pay you in Bitcoin, you have the wallet, but in the transaction, when you do it, you have the will to receive Bitcoin or dollars, that is why it is voluntary, "he said.

 And once the wallet is downloaded, the merchant is obliged to make the transaction: "If you acquire that wallet, you can make the transaction," Argueta said. According to Argueta, all businesses are obliged to make the transaction in Bitcoin and despite the fact that neither the law nor the regulations clearly state it, if the business does not accept it, it is exposed to referrals of infractions to the Consumer Protection Law.

In my opinion, I think this is a welcome development, it can be said that El Salvadorian government are not making Bitcoin payment mandatory (although mandatory) even as it is a legal tender because the payment can be in Bitcoin while the receiver can choose to receive it in fiat and processed automatically.

I think the government is just protecting both parties. Although it may seem that the protocol is much more in favor of the consumers than the sellers. But I guess this is just for the greater good of the two. Businesses are required to accept bitcoin as payment for smoother transactions for those who have their funds in the form of crypto. Maybe they obliged the merchants to accept btc to also keep up with other establishments and to boost the sales. In addition, it's better to be that way so that the consumer can pick whatever they want. If they want to pay in fiat or in btc if they came across a shortage of cold cash. This is just like other modes of payment such as accepting cards. The establishments are asked to accept cards aside from fiat so that the customers can have more alternative options to choose from.

However, I just hope that they have given enough time for those merchants most especially the small businesses to adapt to such policy because certainly, it will be hard for them to adjust from exclusively accepting traditional payment only before and then suddenly they will transition to a new financial system which requires processing through the network and having owned set up wallet.

[aysg76]

For the life of me, I couldn't remember whether El Salvador's fiat currency was in trouble (like Venezuela's), so I checked the Wikipedia page on the country before posting.  I had no idea that they used the US Dollar as their own currency. 

They were using USD as the major currency for all the trades and was accepted in the country or in other words we can say that US dollar was dominating the country when it opted for it's usage and due to all the trade restrictions and hinderances the El Salvador government took the visionary decision to legalize the bitcoin in country.

Another interesting tidbit from the article was this:

As part of the law foreigners can gain permanent residence in El Salvador if they invest 3 Bitcoin into the country.

This was given as options to people to just lock the 3 bitcoins with the government and they become eligible for the residents status in El Salvador as move to promote crypto entrepreneurs and boost the economy and this was tweeted by the President Nayib Bukele:

Sure, but people who own small businesses in El Salvador didn't start them to speculate in a currency like bitcoin, and I can see why there's a lot of resistance to this.  You're thinking like someone who loves bitcoin already, whereas these merchants are basically being forced to accept a form of money they probably don't want any part of.

There are some who doesn't want to be part of this legal enforcement of bitcoin and that's why we see some protest against them in the country but later on they would be the one appraising the government policy but at this time many small merchant have the issue of bitcoin like fees which is most probably solved by LN wallets and they find it easy to have fiat payment over maintenance of wallets and keeping up the btc but as the government is giving them options to hold bitcoin or fiat is good decision as well.But the customers are free and they have to accept Bitcoin if they want it or not and later on convert them to USD as it's the legal fiat of the country.Soon they will not feel agitated with all this and might find btc as best option.

[passwordnow]

There were some videos on the internet that shows you get to pay bitcoin as an option in El Salvador, they're not enforcing it that everyone should buy bitcoin to buy goods.
It's true that merchants and buyers can freely choose what they're up to with what they want to buy. This is really the development that should be welcomed by their people but it's also expected that not everyone is going to welcome this development as there are some protests that happens there because of this.

That's how it should be, the protest about it makes it like they're forcing people to use bitcoin. I knew from the start that they were doing the right thing on this one and the people that were against them weren't really in the right to be against the legalization of bitcoin in El Salvador, probably they're interest are being affected negatively.

But in reality, with those videos that I've seen, it's not really forcing people to use bitcoin. It's about a choice that anyone can make but the merchants have to accept whether their customers pay bitcoin or cash. Anyone has the right to disapprove and approve and those that are rallying, have their own right of protesting as long as they're on the right track. They probably don't understand what bitcoin and that's what they're protesting all about.

[Sithara007]

According to elsalvadorinfo.net, the minimum wage in El Salvador ranges between $ 243 ($1 per hour) for agriculture and $ 365 a month ($1.5 per hour) for the commerce, industrial, and service sectors. The cost of living for single person ranges can go as low as $ 300 and higher than $ 1,300 per month, depending on the person's lifestyle and living location. In comparison to other Central American countries, this places El Salvador's cost of living somewhere in the middle.
Now I'm not exactly sure how much the real estate costs are (they probably vary a lot), but according to some sources, a two-bedroom house outside the capital can cost as little as $ 20,000. This is certainly a thought worth considering.

If you want to live in some of the expat friendly neighborhoods, then the rent can be as high as $2,000 per month (for single individual, the rent may be in the $700-$800 range). El Salvador is not your typical budget destination. Things are pretty expensive, especially if you want to live in neighborhoods with low crime rate. There are countries like Thailand where you can take care of all of your expenses for just $300-$400 per month. But El Salvador is different. If you want quality life, then it may cost you $1500-$2000 per month (for single individuals).

[NeuroticFish]

Bitcoin Law, which stipulates that all economic agents must accept bitcoin as a form of payment when offered by the person acquiring goods or services.

Thank you for clearing it up! It was a good thing to summon you  

$130k for an apartment of 90mp2 in what googles tells me is a safe zone in El Salvador doesn't sound like a bargain to me.

Omg, that's expensive indeed. In Romania you can pretty easily buy half of a duplex house (more than 100mp for living and with a bit of back yard too) in a decent area at that money...

[so98nn]

I think it is best decision by the government. Let’s not forget that it’s really big move for the Government to change their entire monetary system. I mean it’s question of how they would understand whose income what and whose paying how much taxes? The taxation is really important for the government as it is their income source to run the whole country. They bought huge number of bitcoin ATM and for which they will need money to maintain and keep the system running.

Now why the Fiat ? Well, everyone needs to be given the choice and in the current era we can’t force peeps to choose something. In terms Fiat it’s being used since ages and many of them may not accept bitcoin suddenly. So it’s for the best both parties (User and Government).

[Kong Hey Pakboy]

some citizens who protest about the legality of bitcoin in El Salvador just think bitcoin is not safe and is mandatory, in fact the government of El Salvador frees its citizens to use Bitcoin or not.  the president of el salvador knows very well that not all of his citizens will like bitcoin so he doesn't tighten the rules about payments via bitcoin there.

The problem is that not everyone listens to the government and the opposition is just too loud, you know how a shallow river has the most noise right? That's the same for this one. But in the grand scale of things, bitcoin will eventually be accepted in that country slowly because familiarity will eventually sett in among the people.

[sana54210]

If you want to live in some of the expat friendly neighborhoods, then the rent can be as high as $2,000 per month (for single individual, the rent may be in the $700-$800 range). El Salvador is not your typical budget destination. Things are pretty expensive, especially if you want to live in neighborhoods with low crime rate. There are countries like Thailand where you can take care of all of your expenses for just $300-$400 per month. But El Salvador is different. If you want quality life, then it may cost you $1500-$2000 per month (for single individuals).

I am not from El Salvador so whatever I am going to say is not something that is based on experience at all. However when I check "numbeo" which is a website that compares cost of living in cities, San Salvador (capital of El Salvador) has an average of $300 for salary. So, you are telling me that people are living 6x or 7x more than average salary? Who are the others that get less? If the average is $300 and the cost of living is $2000 then there is something wrong.

I checked in more detail about how much it costs to buy food and internet, and it looks quite cheap. So, either you are misinformed about something about the cost of living (found a great home for $250 a month, and it is probably three times size of my flat) or maybe you are right and people are either living a decent life or starving and there is no middle ground to make up for that average.

[stompix]

However when I check "numbeo" which is a website that compares cost of living in cities, San Salvador (capital of El Salvador) has an average of $300 for salary.

I checked in more detail about how much it costs to buy food and internet, and it looks quite cheap. So, either you are misinformed about something about the cost of living (found a great home for $250 a month, and it is probably three times size of my flat) or maybe you are right and people are either living a decent life or starving and there is no middle ground to make up for that average.

Exactly from numbeo:
https://www.numbeo.com/cost-of-living/in/San-Salvador?displayCurrency=USD

Family of four estimated monthly costs are 2,042.33$ without rent (using our estimator).
A single person estimated monthly costs are 567.12$ without rent.
Average Monthly Net Salary (After Tax)   399.38 $   

Yeah, nothing special, it's a well know trend that happens at a lower scale even in western countries.
The wage is for people that work in the city, not for all the people that live there, there are a lot of people who live near the city but work there, drawing down the median income. Do you think that everyone working in Paris would afford city center lifestyle? The minimum wage will barely cover the cost of a one-bedroom apartment in the inner city. Planning on dining there? No way!

The prices are driven up by people with higher than average wages, employees of foreign companies that get paid by their country standards, a lot of diplomatic personal and tourists, those spend driving prices up but their purchasing power isn't reflected in the statistics.
Look up at Antananarivo, it's the perfect example.

[verita1]

From what I think when the government of El Salvador proposes that the bitcoin law allows Salvadorans to make it optional. The government is giving people time to adapt to changes, when they occur, the population will have time to unite.
Fortunately, the system that El Salvador is implementing should work because it is making the resources available to make it so.
Also today the Internet and video channels are good allies for educating people.

[Haunebu]

Never heard of El Salvador until the announcement regarding their government accepting BTC as legal tender. Feels like BTC is helping this small country burst onto the international scene in various ways.

They will probably offer other popular cryptocurrencies as legal payment methods too if the BTC move becomes a massive success in my opinion.

Are there any forum members who actually live in this particular country? They could provide a detailed analysis regarding BTC being accepted as legal tender and whether this particular move is feasible in the long-term.

[Sithara007]

I am not from El Salvador so whatever I am going to say is not something that is based on experience at all. However when I check "numbeo" which is a website that compares cost of living in cities, San Salvador (capital of El Salvador) has an average of $300 for salary. So, you are telling me that people are living 6x or 7x more than average salary? Who are the others that get less? If the average is $300 and the cost of living is $2000 then there is something wrong.

I checked in more detail about how much it costs to buy food and internet, and it looks quite cheap. So, either you are misinformed about something about the cost of living (found a great home for $250 a month, and it is probably three times size of my flat) or maybe you are right and people are either living a decent life or starving and there is no middle ground to make up for that average.

If you are an expat, then I don't expect you to live in the low-income neighborhoods. Given the high crime rate in El Salvador, my preference would be for gated societies with good expat population, and a house in these neighborhoods could easily cost you $2,000 per month for the entire family.

https://www.youtube.com/watch?v=rBo5tlXVaiA

I agree that utility bills (electricity, internet, water.etc) are cheaper compared to other countries. But I really don't think that it is possible for an expat to live comfortably with a monthly salary of $300-$400.

[Poker Player]

Besides, that was August.
The news from Salvador now is:

One day after Bitcoin is legal tender in El Salvador, the legal adviser to the presidency, Javier Argueta, confirmed in the morning interview of Frente a Frente, that it will be an obligation for businesses to receive Bitcoin as a form of payment and It will also be an obligation to have the virtual wallet to carry it out. Otherwise, businesses are exposed to referrals of infractions to the Consumer Protection Law.

Just to add one thing to this debate- According to BBC:

"From today, businesses will be obliged where possible to accept the controversial digital coins as payment."

I've bolded "where possible" because I imagine because there will be some small businesses in small towns and rural areas that may not have internet connection yet, and therefore are not going to be able to receive payments in Bitcoin. I can think of no other reason.

[Kittygalore]

some citizens who protest about the legality of bitcoin in El Salvador just think bitcoin is not safe and is mandatory, in fact the government of El Salvador frees its citizens to use Bitcoin or not.  the president of el salvador knows very well that not all of his citizens will like bitcoin so he doesn't tighten the rules about payments via bitcoin there.

That would change though as time goes by and it's a pretty normal for bitcoin to be used as a medium of payment for any type of transactions, the people will go easy on it. This is a good thing because it works the same with the goal of bitcoin which is the long-term.

[ultrloa]

some citizens who protest about the legality of bitcoin in El Salvador just think bitcoin is not safe and is mandatory, in fact the government of El Salvador frees its citizens to use Bitcoin or not.  the president of el salvador knows very well that not all of his citizens will like bitcoin so he doesn't tighten the rules about payments via bitcoin there.

That would change though as time goes by and it's a pretty normal for bitcoin to be used as a medium of payment for any type of transactions, the people will go easy on it. This is a good thing because it works the same with the goal of bitcoin which is the long-term.

For sure we also think the same when we first heard about bitcoin but as you said there their point of view to bitcoin will be changed once they see it rolling in their country, I understand that there's doubt about it as a scam knowing that there are so many ponzi schemes using bitcoin name to scam people and many people correlate  bitcoin as scam that's why its not surprising to see this but once they see how bitcoin can make there life easy for sure we can see those doubters use bitcoin.

[Kusman]

It is good to hear that El Salvador government doesn't make people be obliged to pay with only Bitcoin. Otherwise, it would create an uneasiness among the people. Because not all people in El Salvador are likely to use Bitcoin in any way now. In this way, maybe those people would also start getting curious about Bitcoin and give it a try without any compelling. The government should act really carefully from now on. Otherwise, they might not reach their target by making Bitcoin legal tender.

[nakamura12]

some citizens who protest about the legality of bitcoin in El Salvador just think bitcoin is not safe and is mandatory, in fact the government of El Salvador frees its citizens to use Bitcoin or not.  the president of el salvador knows very well that not all of his citizens will like bitcoin so he doesn't tighten the rules about payments via bitcoin there.

That would change though as time goes by and it's a pretty normal for bitcoin to be used as a medium of payment for any type of transactions, the people will go easy on it. This is a good thing because it works the same with the goal of bitcoin which is the long-term.

It will certainly change if they will do a research about bitcoin some may use bitcoin right away to not being out of trend. Not all people know bitcoin but they will use it sooner or later if they start doing some research. There is one person who ask for help about wanting to accept bitcoin as payment so, my guess is the others that doesn't like bitcoin will eventually use it. After all, the citizens are free to decide whether to accept/use bitcoin or not.