El Salvador becomes the first country to approve Bitcoin as legal currency. End the Fed

[James_Madison_Lives]

https://finance.yahoo.com/news/el-sa...120440725.html

Is this a good thing?

[dannno]

Good thing for who?

El Salvador?

Hell ya..

The banks?

Not so much..

[Anti Globalist]

Sounds like a good thing to me.

[Matt Collins]

[Brian4Liberty]

I get the feeling that the current leadership of El Salvador are terrible, evil people, and the media will begin to tell us all about it sometime soon.

[Krugminator2]

I get the feeling that the current leadership of El Salvador are terrible, evil people, and the media will begin to tell us all about it sometime soon.

Well..... It appears they are actually. 70% of the people in the country aren't even sophisticated enough to have bank accounts. Bitcoin fluctuates wildly. It isn't a currency. It is a penny stock. Money has to to have price stability to be useful.

[Matt Collins]

[Brian4Liberty]

Well..... It appears they are actually. 70% of the people in the country aren't even sophisticated enough to have bank accounts. Bitcoin fluctuates wildly. It isn't a currency. It is a penny stock. Money has to to have price stability to be useful.

LOL. That didn't take long did it?

“Dark forces have captured #ElSalvador, where corruption is thick as thieves.”

Interesting. They make the opposite case of Mr. Hanke above. They claim that international money transfers are less expensive using bitcoin. Maybe they should use dogecoin too.

And their lesson on inflation at the end is not very complete or Austrian. “Inflation” is purely about prices? Not really...

[jmdrake]

I get the feeling that the current leadership of El Salvador are terrible, evil people, and the media will begin to tell us all about it sometime soon.

Yeah...I was wondering that. El Salvador could go the way Iraq did after Saddam tried to get off the petro-dollar was well as Libya after Ghaddafi tried to do the same. The silver lining for El Salvador is, considering they are net importers, they don't seem to have anything the U.S. wants. If Venezuela were to do this on the other hand...

Well..... It appears they are actually. 70% of the people in the country aren't even sophisticated enough to have bank accounts. Bitcoin fluctuates wildly. It isn't a currency. It is a penny stock. Money has to to have price stability to be useful.

LOL. Bitcoin has a lot more price stability than some Latin American currencies. And what does the "lack of sophistication" of the El Salvadoran people have to do with the current leadership? The current president was elected in 2019. You can hardly expect him to make that much of a different in the education level of an entire country in 2 years. However there has been a dramatic drop in crime in El Salvador to the point where they can boast about having better crime rates than some U.S. cities.

[Krugminator2]

LOL. Bitcoin has a lot more price stability than some Latin American currencies.

They use the dollar now. Absolutely no reason to use something else. The dollar index had a major fluctuations this week relative to normal. It moved 2%. Bitcoin went up fivefold since the end of last year and then dropped 50%.

A volatile currency makes planning for the future impossible for entrepreneurs. I am not anti-Bitcoin or crypto. They are speculative assets like Tesla stocks. Currencies- they are not.

And what does the "lack of sophistication" of the El Salvadoran people have to do with the current leadership?

The odds that the average person living in a hut will transact in Bitcoin are zero point zero percent. This is all theater.

[dannno]

Well..... It appears they are actually. 70% of the people in the country aren't even sophisticated enough to have bank accounts. Bitcoin fluctuates wildly. It isn't a currency. It is a penny stock. Money has to to have price stability to be useful.

Lol, you didn't hear the circular logic he was using?? He said nobody is going to use bitcoin, so it won't work. They guy asked him, what if they do, then will it work? His answer was they wouldn't use it.. which leads us to:

The odds that the average person living in a hut will transact in Bitcoin are zero point zero percent. This is all theater.

The whole idea is that A LOT more people in El Salvador have smart phones than have bank accounts.. anybody with a smart phone can use bitcoin, thus, bitcoin will be more useful than the dollar for a lot of people in El Salvador.

[jmdrake]

They use the dollar now. Absolutely no reason to use something else.

You didn't pay attention. With being net importers their dependence on the dollar is killing them.

The dollar index had a major fluctuations this week relative to normal. It moved 2%. Bitcoin went up fivefold since the end of last year and then dropped 50%.

We are edging towards hyperinflation. Even average Americans are seeing this.

A volatile currency makes planning for the future impossible for entrepreneurs. I am not anti-Bitcoin or crypto. They are speculative assets like Tesla stocks. Currencies- they are not.

As long as you can buy or sell with it, it's a currency.

The odds that the average person living in a hut will transact in Bitcoin are zero point zero percent. This is all theater.

Most El Salvadorans don't live in huts. And most of the world has cell phones now.

[dannno]

For those who were worried, El Salvador is not REQUIRING businesses to accept bitcoin. A lot of the protest in El Salvador were based on false reporting that they would be required to accept it.

https://twitter.com/AaronvanW/status...36902274220040

[Occam's Banana]

https://twitter.com/Snowden/status/1486070168853831681

[Occam's Banana]

https://twitter.com/BBCAfrica/status...81619798380544

[ClaytonB]

https://twitter.com/Snowden/status/1486070168853831681

"People might start using it."
"And how's that a problem?"
"It's a problem because people might start using it."

[Anti Globalist]

Hopefully this will cause a chain reaction of many other countries using bitcoin as legal tender.

[Krugminator2]

For those who thought turning primitives in the third world into crypto speculators, feel free to take your L.

The government’s crypto coffers have been cut in half, bitcoin adoption nationwide isn’t really taking off, and crucially, the country needs a lot of cash, fast, to meet its debt payments of more than $1 billion in the next year. This comes as the price of bitcoin has fallen more than 70% from its November 2021 peak, and more than 55% from the time Bukele announced his plan.



Meanwhile, El Salvador’s economic growth has plummeted,its deficit remains high, and the country’s debt-to-GDP ratio — a key metric used to compare what a country owes to what it generates — is set to hit nearly 87% this year, stoking fears that El Salvador isn’t equipped to settle its loan obligations.
Pair these economic woes with a renewed war on gang violence, and you have all the fixings of a country on the brink.
“On the surface, the whole bitcoin thing hasn’t really paid off,” said Boaz Sobrado, a London-based fintech data analyst.
It isn’t bitcoin’s fault that the government is edging toward financial ruin.


The government has an unrealized paper loss on bitcoin of around $50 million, which the finance minister notes is less than 0.5% of the national budget. In aggregate, the entire experiment (and all its associated costs) have only run the government around $374 million, according to estimates. That’s not nothing — especially considering the fact that El Salvador has $7.7 billion of bonds outstanding — but to an economy of $29 billion, it is comparatively small.


The optics aren’t good, though.
Negotiations have stalled with international lenders in part because they are unwilling to throw money at a country that is spending millions in tax dollars on a cryptocurrency whose price is prone to extreme volatility. Rating agencies, including Fitch, have knocked down El Salvador’s credit score citing the uncertainty of the country’s financial future, given the adoption of bitcoin as legal tender. That means that it’s now even more expensive for President Bukele to borrow much-needed cash.


“In terms of their financial situation, El Salvador is in a very difficult place. They have a lot of bonds that are trading severely discounted,” continued Sobrado.

https://www.cnbc.com/2022/06/25/el-s...-finances.html

[dannno]

For those who thought turning primitives in the third world into crypto speculators, feel free to take your L.



https://www.cnbc.com/2022/06/25/el-s...-finances.html

Did you even read the article, bitcoin zippy?

Even the fake news isn't blaming bitcoin.. the financial stability of the government is not dependent on bitcoin, and the lack of adoption by the populace is clearly not a factor in anything.

The only way bitcoin would have benefited them in the shorter term would be if they bought at the bottom and there was widespread adoption before a big increase in the value of bitcoin.

It isn't going to happen overnight, but if we see a larger adoption of bitcoin and a dollar crash, they will benefit immensely. In the longer term, I don't see how they can lose.

[dannno]

https://twitter.com/nayibbukele/stat...56901297143809

El Salvador president addresses bear market concerns with Bitcoin hopium
https://cointelegraph.com/news/el-sa...bitcoin-hopium

on-chain analytics signal the oncoming of Bitcoin’s reversal back to its former glory.

[Krugminator2]

[Krugminator2]

"El Salvador Had a Bitcoin Revolution. Hardly Anybody Showed Up"

https://www.bloomberg.com/news/artic...mium#xj4y7vzkg

“No one really talks about Bitcoin here anymore. It’s kind of been forgotten,” said former El Salvador central bank chief Carlos Acevedo. “I don’t know if you’d call that a failure, but it certainly hasn’t been a success.”

The Bitcoin experiment promoted by the Bukele administration has significantly raised the market’s risk perception of the country,” said Fabiano Borsato, Chief Operating Officer of Torino Capital LLC. “It’s being implemented in a context of fragile public finances, high and persistent fiscal deficits and doubts about the rule of law in the country. This, in our opinion, will prevent El Salvador from accessing financing in the international markets under favorable conditions in the short and medium term.”

[dannno]

El Salvador’s Bitcoin President receives 91% approval rating: La Pensa Grafia
The poll came from one of El Salvador's leading opposition newspapers, prompting a self-congratulatory Tweet from the 'Bitcoin President'.

https://cryptoslate.com/el-salvadors...-pensa-grafia/


El Salvador President Bukele to Introduce Bill That Would Eliminate Taxes on Technology Innovations
The country in 2021 became the first nation to adopt bitcoin as legal tender.

https://www.coindesk.com/policy/2023...y-innovations/


Binance and Its CEO Sued by CFTC Over US Regulatory Violations
CFTC alleges world’s biggest crypto exchange shirked rules
Case was filed in federal court in Chicago on Monday

https://www.bloomberg.com/news/artic...pses#xj4y7vzkg


Nayib Bukele to Make El Salvador New Crypto Hub, Binance CEO Joins

https://u.today/nayib-bukele-to-make...ance-ceo-joins

[dannno]

"El Salvador Had a Bitcoin Revolution. Hardly Anybody Showed Up"

https://www.bloomberg.com/news/artic...mium#xj4y7vzkg

“No one really talks about Bitcoin here anymore. It’s kind of been forgotten,” said former El Salvador central bank chief Carlos Acevedo. “I don’t know if you’d call that a failure, but it certainly hasn’t been a success.”

The Bitcoin experiment promoted by the Bukele administration has significantly raised the market’s risk perception of the country,” said Fabiano Borsato, Chief Operating Officer of Torino Capital LLC. “It’s being implemented in a context of fragile public finances, high and persistent fiscal deficits and doubts about the rule of law in the country. This, in our opinion, will prevent El Salvador from accessing financing in the international markets under favorable conditions in the short and medium term.”

Don't worry, bitcoin will easily overcome all your fake news propaganda.

[dannno]

Africa next?

https://www.cnbc.com/2023/03/26/bitc...ng-system.html

Bitcoin is poised to blow up Africa’s $86 billion banking system

- The Lightning Network slashes the cost of bitcoin transactions to virtually zero and enables nearly instantaneous cash payments around the planet.
- This so-called “layer two” technology is built on top of bitcoin’s main chain.
- CNBC spoke to entrepreneurs in Nigeria and South Africa who have integrated the Lightning Network into mobile money.

ACCRA, Ghana — Block
CEO Jack Dorsey and his top brass descended on Accra for the inaugural Africa Bitcoin Conference in December to talk about one of the most potentially disruptive and transformative alternatives to the continent’s existing financial system: bitcoin.


Since its inception in 2008, this unfamiliar form of money has alternatively been disdained as an absurdly complex toy for libertarian techies, a legalized form of gambling, a speculative bet to get rich quick, and a vehicle for criminals and fraudsters to obscure the origins of their ill-begotten gains.


But this parallel financial system can also serve a tangible social good, offering an onramp to the financial system for people who would otherwise be left out. In countries where the vast majority of the population is unbanked, national currencies are no longer a safe store of value, remittances comprise a hefty portion of GDP, and international sanctions complicate connections to the global economy, a virtual currency that doesn’t require an intermediary to approve transactions can be a vital lifeline for survival.


As cryptocurrency continues to rise in prominence and becomes a growing flashpoint for regulators, Dorsey and his deputies are providing an essential counternarrative: Bitcoin brings financial power to people who would otherwise have none.


“It doesn’t matter to me if the price goes down or up, because I can still use bitcoin as a vehicle to move money around the world instantaneously,” said Mike Brock, the CEO of TBD at Block, a unit which focuses on cryptocurrency and decentralized finance.


“I can exchange dollars for bitcoin and then bitcoin for Brazilian rial. There is a market for bitcoin in every corner of the world today,” continued Brock.


A broken financial system
Moving money in Africa is an expensive and complicated process.


Commercial bank branch access is limited, especially for people living in remote and rural areas. Digital banking options are also limited. Tack on rampant hyperinflation, widespread government corruption, and capital controls trapping domestic cash in banks, and money can stop making sense altogether.


“If someone wants to move money to the country next door, normally, you’d have to fill up a suitcase full of cash and move it over the border,” explains Ray Youssef, CEO of Paxful.


Part of the problem stems from the continent’s quasi-colonial payment framework, in which roughly 80% of cross-border payments originating from African banks are processed offshore, mostly in the U.S. or Europe. That translates to higher costs and processing times that are sometimes measured in weeks.


Then there’s mobile money, which has been around since the early 2000s. Think of it like an electronic wallet tied to a phone number that does not require a smartphone or data to operate. Users can pay bills and shop with their phone through SMS texting, instead of having to rely on traditional banking options.


Africa’s mobile money transactions rose 39% to more than $700 billion in 2021, according to data from the GSM Association, a non-profit representing mobile network operators worldwide. World Bank data shows that account ownership at a financial institution — or via a mobile money service provider — has more than doubled in the last decade, rising to 55% of adults in Sub-Saharan Africa.

But even as adoption proliferates, mobile money users don’t get the perks of legacy banking, including earning interest on banked savings and building up a credit score based on a history of spending. Interoperability on the continent also remains a major issue with this alternative way of banking.


“The entire banking system in Africa is completely and utterly broken, even amongst the mobile money providers, the telcos,” said Youssef from Paxful, a peer-to-peer crypto marketplace where users can directly buy and sell tokens with one another.


“Two thousand payment networks and only 2% of them talk to each other. That number continues to grow. It’s not getting better, it’s actually getting worse,” continued Youssef.


Companies like Western Union and MoneyGram offer an expansive physical network of storefronts around the world designed to move money for those who are unbanked. That cash network was extraordinarily difficult and expensive to build, which is why there aren’t a lot of direct competitors. It is also why those cash transfers often incur substantial fees.


Bitcoin could eliminate all these intermediaries, allowing citizens to send digital payments directly to one another, without relying on credit and without incurring multiple settlement fees along the way.


“We’re going to move to a model where we can make payments without IOUs, or credit, or promises, or fiat,” said Alex Gladstein, chief strategy officer for the Human Rights Foundation, an organization that works with activists from authoritarian regimes around the world. “It’s literally like sending a piece of gold or a $20 bill instantly somewhere else.”


“If you can get access to the internet, you can settle bitcoin payments,” said Brock. “And the government can’t do anything about it.”


Dorsey points to the example of what happened in Nigeria during the protests against the brutality of the country’s Special Anti-Robbery Squad — a movement referred to as #EndSARS.


“The Nigerian government went to various bank corps to stop protesters from receiving money — which bitcoin made up for,” Dorsey said in Accra. “So our whole reason for being as a company is solving the same problem that bitcoin will ultimately solve for everyone in the world.”

Moving money on the bitcoin blockchain at its base layer has its own challenges. At times of peak demand, fees will often spike higher, and if a user is unwilling to pay a premium for the transaction, they may have to wait for more blocks of transactions to get confirmed before their transfer goes through.


Bitcoin’s Lightning Network helps alleviate both of those problems by slashing the cost of transactions to virtually zero and enabling nearly instantaneous cash payments around the planet – making bitcoin a more effective payment rail. This so-called “layer two” technology is built on top of bitcoin’s main chain, in part because bitcoiners are conservative about introducing changes to the base layer, for fear of opening it up to hacks or other mischief.


Yellow Card — Africa’s largest centralized cryptocurrency exchange run by CEO Chris Maurice — is also looking to embed this layer two technology into the platform, in order to drive down the price of transactions to virtually zero. Currently, the exchange doesn’t charge a commission for transactions, but network fees can be pretty steep when a lot of trades are happening at once.


“It’ll have a pretty big impact to our customers, because a lot of them are very price sensitive,” says Justin Poiroux, the co-founder and CTO of Yellow Card.


Yellow Card’s plan is still in its infancy, but Poiroux tells CNBC that he thinks the Lightning Network could ultimately provide a lot of value for its retail customers.


Because Lightning offers a universal monetary language, money can travel around the world between any Lightning-enabled bitcoin wallet. Someone who uses a platform like Block’s Cash App — a regulated, American financial product with 51 million monthly transacting users which integrated with the Lightning Network in Feb. 2022 — can pay any Lightning invoice in the world instantly.


“It’s a new way of doing business. It’s a different paradigm entirely,” said Gladstein.


The crypto product lead at Cash App, Miles Suter, believes that a big part of bitcoin’s utility is how it gets around broken and convoluted payment systems that don’t talk to each other.


“At Cash App in particular, we’ve always been really interested in taking bitcoin beyond just being seen an investment and bringing day-to-day utility to it,” Suter told CNBC on the sidelines of the Africa Bitcoin Conference.


“In many ways, the people on the African continent are already doing that with the tools they have,” continued Suter.


Sending cash with Lightning
Bernard Parah is a 30-year-old entrepreneur living in Jos, Nigeria, about a five hour drive from the capital city of Abuja. He’s the CEO of Bitnob, an app that lets users across Africa buy, save, and invest in bitcoin. Bitnob is SMS-based and piggybacks on the mobile money system, making it easier for people to send money directly into bank accounts and mobile money wallets in African countries.


Parah recently teamed up with Strike, a Lightning Network payments platform, to launch a feature called “Send Globally” that allows Americans to transfer money to people living in Nigeria, Ghana, and Kenya.


It uses local fiat cash on either side of the transaction, but bitcoin is used under the hood as the pipeline to jump money over the border. The end user never touches the cryptocurrency themselves.


“We’re able to settle into bank accounts or mobile money accounts, without the recipients having to interact with bitcoin themselves,” Parah tells CNBC.


“Over time, we’ve seen that there are still people who really don’t understand how to use bitcoin; who don’t care about bitcoin. What they do care about is their problems getting solved,” continued Parah.

It feels like a wire transfer or a Venmo payment, according to Strike CEO Jack Mallers.


“It’s instant. There’s no debt. There’s no credit. There’s no delays,” explains Mallers.


The model works because Parah and Mallers are willing to take on the liability associated with the transfer by holding cash in escrow on either end of the exchange.


Once the money is received in Nigeria, Bitnob — which is a regulated entity with connections to the local banks — will take that bitcoin and turn it into their local currency.


“It’s just two regulated entities communicating over the language of bitcoin and cutting out excess fees,” said Suter. “I think that’s revolutionary.”


Mallers says that they offer more competitive foreign exchange rates by using bitcoin as a price-setting intermediary, a sort of new world reserve currency.


“The rate that we got was actually 60% better than the traditional forex market rate,” said Mallers. “The way to actually think about how we’re achieving forex if we clear through bitcoin is, ‘I have dollars. How many bitcoin can I get for my dollars? And then how many naira can I get for my bitcoin?’” said Mallers.


“It’s acting as the most liquid, accessible, global instrument for us to clear and settle value amongst each other,” he said.


The arrangement also offers a few big ancillary benefits, including interoperability with payment apps around the world that have tens of millions of users.


Block’s Suter explained that Cash App could theoretically interoperate with Bitnob.


“We’re only live in the U.S. right now, but that doesn’t mean we can’t speak to Bitnob in Nigeria and transfer value instantly and for free across these borders,” Suter said of Cash App.


Meeting customers where they are

South African developer Kgothatso Ngako, who goes by KG, has integrated the Lightning Network into the GSM network, combining the best of a few worlds, in a larger effort to meet customers where they are.


“My focus is giving people without an internet connection the ability to send or receive bitcoin,” Ngako said.


KG calls his custodial Lightning wallet “Machankura” — South African slang for money. Whereas most Lightning transactions today require a smartphone and data, Ngako’s service integrates lightning via Unstructured Supplementary Service Data, or USSD, which is the protocol that mobile money runs on. (It is similar to HTTP, or HyperText Transport Protocol, the protocol on which the web was built.)


Ngako tells CNBC that he currently has around 3,000 users spread across eight countries, with a concentration in South Africa, Uganda, Kenya, and Nigeria. In his home market of South Africa, there are strict rules around currency exchange, which make his product even more appealing to some users looking to move their money abroad.


“The South African Reserve Bank regulates the cross-border flow of capital — including the exchange of currency — to and from South Africa. You need some form of approval to convert ZAR into foreign currency,” said Ernest Marais, partner at Johannesburg law firm, Tabacks.


KG’s Machankura is compatible with any Lightning wallet on the planet. In practice, this means that someone with the Cash App in San Francisco, for example, could instantly send bitcoin via Lightning to the phone number of someone with a data-less, basic phone living in a remote part of Uganda.


Ngako’s project does face some risks, including regulatory blowback.


Marais tells CNBC that because the South African Reserve Bank cannot regulate the cross-border flow of cryptocurrency, it is considered to be illegal and a criminal offense — though crypto regulation largely remains nebulous across most of the continent.


“All African central banks, except for Central African Republic, have made notices stating that they don’t issue bitcoin and hence they don’t regulate it,” counters Ngako, adding that a bitcoin transaction cannot be considered a cross-border exchange as bitcoin transactions aren’t regulated within the central bank’s institution.


But the rules are confusing for everyone involved.


“The actual location of crypto assets is an anomaly. At what point does it leave the country?” continued Marais.


Ultimately, Ngako believes that once Machankura begins to scale, it will be a major driver of bitcoin adoption across the continent. To that end, Ngako is raising money and building — a common refrain among the entrepreneurs on the ground in Accra.


As Dorsey said in Africa, “More and more mass adoption will, in my belief, take away all the oxygen” from governments attempting to control behavior through financial oppression.


“So what do we do? We build, we build, we build, we build, we build, they can’t stop us. And that’s what’s important.”

https://www.cnbc.com/2023/03/26/bitc...ng-system.html

[dannno]

El Salvador Hails 300 Homicide-Free Days, Plans to Export Its Security Strategy
The country’s President Nayib Bukele said January 2023 has been the safest month in 201 years as a result of his government’s war on gangs launched in March 2022

Read more: (El Salvador Hails 300 Homicide-Free Days, Plans to Export Its Security Strategy) https://www.bloomberglinea.com/engli...rity-strategy/


In context, that number of days comes from the total of his term which has been almost 4 years I believe.

However, compared to the number of homicides in the state of Missouri, which has a similar population to El Salvador, and El Salvador beats them out in having fewer homicides in 2022.

[Matt Collins]

El Salvador Hails 300 Homicide-Free Days, Plans to Export Its Security Strategy
The country’s President Nayib Bukele said January 2023 has been the safest month in 201 years as a result of his government’s war on gangs launched in March 2022

Read more: (El Salvador Hails 300 Homicide-Free Days, Plans to Export Its Security Strategy) https://www.bloomberglinea.com/engli...rity-strategy/


In context, that number of days comes from the total of his term which has been almost 4 years I believe.

However, compared to the number of homicides in the state of Missouri, which has a similar population to El Salvador, and El Salvador beats them out in having fewer homicides in 2022.

https://www.youtube.com/watch?v=WtkI-QAgM6w