21.10.2021

Co-founder of Popular Crypto Service Criticizes Bitcoin Adoption in El Salvador

The El Salvadorian government’s approach to Bitcoin adoption was criticized by the co-founder and vice chairman of the Blockchain.com platform, Nicholas Carey.

At the Token 2049 event in London, he stated that innovations related to cryptocurrency are being imposed on the local population “forcibly” instead of gradually integrating BTC into the economy. Nevertheless, a significant part of the country’s citizens really met the law on the adoption of Bitcoin as a legal tender in El Salvador with noticeable resistance and misunderstanding.

We checked the latest data: this morning, Bitcoin is trading in the 55 thousand dollar zone. At the same time, it is important to note that yesterday before lunchtime, the cryptocurrency exceeded the mark of 56 thousand dollars, which had not happened for several months.

At the current exchange rate, BTC is 15 percent behind its all-time high.

How Bitcoin is popularized

For the first time, President of Salvador Nayib Bukele announced the adoption of cryptocurrency at the national level back in May at a cryptoconference in Miami. The idea behind the government’s new strategy is largely motivated by El Salvador’s dependence on remittances from abroad. According to the World Bank, El Salvador is one of the world’s most dependent economies on the transactions of its citizens who work in other countries.

Bukele is also positioning Bitcoin as a means of gradually reducing dependence on the US dollar. However, Carey is sure that even good intentions in the country are not being implemented quite as needed. Here is his remark, in which the expert shares his attitude to the situation.

I think that criticizing the Bitcoin adoption program in El Salvador is very justified from the point of view of its implementation. One of the main principles of cryptocurrency is mass adoption, but only on a voluntary basis.

That is, the expert believes that the current approach is inherently wrong. After all, Bitcoin, other cryptocurrencies and the benefits of blockchain technology can be covered in a different way, in addition to calculating discounts on gasoline when using BTC. This idea became known at the beginning of the week.

Over the past months, several protests have erupted in El Salvador against the cryptocurrency law. And although many members of the crypto community have warmly welcomed Bukele’s initiative, international organizations and banking experts see it as a problem for the long-term development of the economy of El Salvador. Their main complaint is the too high volatility of the BTC price, that is, sharp jumps in its rate.

In addition to Carey, the famous billionaire Mike Novogratz also attended the Token 2049 event, who at one time made a fortune on the rapid rise in the price of BTC. He stated that Bitcoin as a “finished product is already working”, that is, it performs its main function – it serves as a means of capital accumulation and a decentralized payment network.

True, all the positive comments regarding Bitcoin itself do not impress the Salvadorans, some of whom the law on the adoption of cryptocurrency is simply not profitable. For example, here is the opinion from an anonymous businessman in El Salvador, voiced in an interview with Decrypt.

I feel bad when I see how Bitcoin maximalists around the world are welcoming the adoption of cryptocurrency. Although in reality, if they sat down and read the new laws of the government, they would be convinced that things are not at all what they imagine.

Yet Carey believes that the experience of El Salvador will serve as an additional impetus for other states. The expert continues.

I think the Bitcoin adoption model sets a precedent that other countries will soon turn their attention to.

This is true: for example, on the eve of Colombian Senator Gustavo Petro proposed to use renewable energy sources in the country to create mining centers. He was impressed by Bukele’s strategy to transform the Salvadoran power plant into a Bitcoin mining base. Accordingly, in the future there may be more and more such initiatives.

We believe that the image of the entire industry as a whole will depend on the impact of crypto on the economy of El Salvador. If its adoption turns out to be a profitable decision of the government in the long term, it will contribute to the growth of the popularity and price of Bitcoin. This means that it will create a profitable opportunity for making money on transactions with it and will attract the attention of the governments of other states. And this is clearly worth the wait.

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