The government of El Salvador is forging away at its President Nayib Bukele’s dream of creating a bitcoin (BTC)-powered economy – with the cabinet “discussing” plans to allow firms to pay employees in BTC and preliminary meetings with international Bitcoin players already underway.
Speaking to the media, Rolando Castro, the Salvadorian Minister of Labor and Social Welfare, said that government ministers are currently discussing whether companies in the country should pay staff in BTC – although he later watered down the assertion.
Per La Prensa Gráfica, Castro told reporters:
“[Paying salaries in BTC] this is an issue that is being discussed at the moment. It is being analyzed by the Minister of Finance and the Ministry of Economy. […] In due course, there will be a meeting with the entire cabinet, […] but it is still too early to be able to advance on this matter.”
On Twitter, Castro subsequently sought to temper talk of BTC pay, writing in response to a media report about his comments:
“A clarification: At no time have I [stated that salaries will be paid in BTC]. When asked about the matter, I only said that it was too early to talk about salaries, and that I am focusing on finding more and better jobs [for Salvadorians]. The monetary issue is a matter for the economy-focused part of the cabinet, of which I am not a part.”
Meanwhile, Bukele has also been busy – entertaining prominent members of the crypto community. The crypto podcaster Peter McCormack was among those summoned to a meeting with the President. And while Bukele was dressed in a typically dapper manner, much was made of McCormack’s attire.
The President quipped on Twitter that talking about “new volcano geothermal energy plants with bitcoin mining facilities, as well as “BTC adoption as legal tender, financial inclusion for millions and the ultimate development of humankind” topped “G7 meetings with no Metallica t-shirts.”
Others were similarly impressed with McCormack’s choice of clothing.
I love the Bitcoin world! Peter McCormack meeting the president of El Salvador in a Metallica t-shirt and ripped je… https://t.co/ggyxglCJT3
— Marc van der Chijs (@marcvanderchijs)
Meanwhile, the CEO of the crypto exchange platform Paxful Ray Youssef also took to Twitter to announce that he had “rolled into El Salvador to a king’s welcome thanks to El Presidente” as part of a “Bitcoin delegation.”
Youssef posted a picture of himself smiling broadly and flanked by four armed police officers.
Rolled into El Salvador ## to a kings welcome thanks to El Presidente. The #Bitcoin delegation has arrived and hist… https://t.co/l5R3lYfw8R
— Ray “Uwaifo” Youssef (@raypaxful)
And in the United States, Caitlin Long, the Founder and CEO of the Avanti Financial Group, claimed that developments in El Salvador were shaking up legal conversations in America. She said that “El Salvador making bitcoin legal tender has already moved the United States in ways few yet understand.”
Long also pointed out that a draft Uniform Commercial Code and Emerging Technologies Committee proposal contained a clause referring to “intangible” forms of money.
She conceded that this “draft proposal isn’t law yet anywhere,” but claimed “it’s evolving fast,” and that the “new definition leaves room for account-based money (i.e. central bank digital currencies) and also recognizes ‘super-negotiability’ for bitcoin.”
But it appears not everyone is convinced that Bukele’s plan is sound – with one prominent economic thinker claiming that the BTC adoption law is a “violation of human rights.”
According to a separate report from La Prensa Gráfica, Jonathan Menkos, the long-serving president of the Central American Institute for Fiscal Studies (ICEFI) – a think tank that conducts economic research and technical analysis related to fiscal issues in the region – has hit out at Bukele’s move.
Menkos was quoted as stating that BTC’s volatility would reflect risks onto the public – and were pensions and other state payments made in the token, could jeopardize the financial security of the entire nation.
“I do not know of any Nobel laureates who are in favor of cryptocurrencies.”
He went on to equate the move to “playing with fire” and claimed that the law made little sense in El Salvador, a nation that already had no monetary policy due to the dollarization of the economy, stating: “And to this, [Bukele] will add uncertainty and risk more to the economy, and people’s incomes.”
“The shared desire of humans is the desire to invest. We want to invest in something concrete, like a car, a house, a business, not in something that can evaporate from one day to the next. For Salvadorans, bitcoin [adoption] is a violation of the human right to well-being and of course to decide what to do with one’s own resources. Investing in a cryptocurrency is not the same as investing in the real economy, buying a house […] or having savings,” the ICEFI chief concluded.
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