El Salvador’s President Nayib Bukele has clarified that the country’s bitcoin law mandates acceptance of bitcoin only among large corporations, rather than small merchants. When the law took effect, its controversial Article 7 was not actually applied to anyone.
Article 7. Nature of
The bitcoin law – which made bitcoin legal tender in El Salvador last September – contained a specific stipulation that proved controversial even among bitcoiners. “Every economic agent must accept bitcoin as a form of payment when it is offered to receive a good or service,” Reading An English translated version of the text.
A law is meaningful only when it is enforced. In a recently released interview, President Bukele clarified that this condition only applies to large corporations. “Little man – he can do whatever he wants,” she said.
Bukele said the law was not even being implemented – nor was there any plan to implement it anytime soon. It does, however, provide the ability for enforcement against “large corporations” or “large banks” when needed.
Many in the cryptocurrency community – from Coinmetrics co-founder Nick Carter to Ethereum co-founder Vitalik Buterin – criticized Article 7 when it appeared to be “contrary to the ideals of freedom”. Alternatively, Bukele believes that the article increases the freedom for average customers to choose which currency they want to purchase the product with.
“You can’t put [this law] In work without it,” he explained. “You have to create an environment where their bitcoin is accepted as a method of payment with the big corporations.”
Bukele’s interviewer Peter McCormack found that the bitcoin law had its intended effect on the ground in El Salvador. While large stores such as Starbucks and Walmart were ready to accept bitcoin on September 7, there were few smaller merchants in the San Salvador market at the time.
Articles 8 and 12
The president also pointed out that Articles 8 and 12 of the Bitcoin Act subvert any mandated effect of the law.
The former enacts state-provided options for merchants accepting bitcoin to automatically convert their holdings into dollars if desired. The latter stipulates that merchants without the technical ability to accept bitcoin are excluded from Article 7.
Upon enactment, polls indicated that the majority of Salvadorans disapproved of the bitcoin law. Still, the state-provided Chivo wallet collected more active users than any Salvadoran bank within three weeks.
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