El Salvador is the first country in the world to authorize cryptocurrency in internal trade, yesterday the approval of the Senate which surprised all economic observers in the world. The news was in the air because the measure had already received the endorsement of President Nayib Bukele last June, and immediately transformed into law by Parliament. Economic operators and businesses will now be forced to accept cryptocurrency and all prices for products and services must be expressed in both dollars and bitcoins, even if salaries and pensions will continue to be paid in dollars, Ansa specifies. A caution adopted by the government due to the skepticism with which the population has accepted the measure. According to a study by the Institute of Public Opinion (Iop), 66,7% of the population believes that the Bitcoin law should be repealed while 65,2% is against the government using public funds to finance its introduction.
Analysts are convinced that after El Salvador there will be other countries that will follow digital monetary innovation.
A financial engineering solution that is very popular with countries with high public debt and developing countries while it is not ideal for developed Western countries: in fact, giving legal tender to an electronic money whose supply cannot be effectively controlled cannot be it represents perhaps the best possible scenario for more developed countries. On the one hand, in fact, the decision for a developing country like El Salvador to open up to bitcoins can be at least partially explained as the attempt to create an ecosystem capable of attracting brains and liquidity from all over the world by giving support to local economy, especially now that China for environmental reasons has started a crackdown on the bitcoin mining activity, on the other hand the push that comes from the private sector for the major central banks in the world to adopt an electronic money system it's getting stronger. The most recent example comes from the Twitter social platform whose Tip Jar function could soon integrate a payment option via cryptocurrencies. According to what has been learned, from May it will be possible to send 'tips' to users of the microblog in English for particular merits, such as sharing useful news on the platform. But also the founder of Tesla Elon Musk He is a great supporter of bitcoins, although last May he had to give in to pressure from environmentalists, suspending the acceptance of electronic money as a form of payment due to the high consumption of electricity necessary for their extraction.
The market, therefore, points in one direction and the way central banks, especially the Federal Reserve, will manage the phenomenon, it will be of crucial importance for the resilience of the dollar-based international financial system, as historian Neill Ferguson pointed out in an analysis on Bloomberg. Indeed, if on the one hand autocratic countries, such as China, see the development of electronic money as a vehicle for greater economic control, Western central banks should instead propose an alternative model that incorporates new applications in order to encourage innovation and development.