One of El Salvador’s major opposition parties, Farabundo Martí National Liberation Front, has filed a lawsuit against the adoption of bitcoin as the country’s legal tender.
The bill to make Bitcoin its official fiat was voted into law by the El Salvadoran legislature on June 8.
The country’s president, Nayib Bukele, engaged stakeholders and the general public in a Twitter Space event to further highlight the advantages of having Bitcoin as well as the US dollar as a legal tender.
Despite the positive reception that the announcement garnered from cryptocurrency supporters globally, it has met with several drawbacks which make the chances of widespread adoption look increasingly slimmer.
One of the setbacks is the low readiness of citizens to adopt Bitcoin as a mode of payment. A poll by the Chamber of Commerce and Industry of El Salvador on whether people are thrilled to trade with bitcoin got the response of 1,600 people within 4 days.
The results showed that at least 8 out of 10 people do not want to make payment and receive salaries in bitcoin. Among those who responded to the query, 43% are entrepreneurs while 57% identified themselves as non-entrepreneurs.
A large percentage of the entrepreneurs with small and medium businesses said that they would prefer to be able to choose whether or not they want to accept bitcoin. 92% of the non-entrepreneurs also said they are sceptical of being bound by the law to accept bitcoin and would instead prefer to be able to choose to accept or reject it.
Following the result of the survey, one of the government’s major political oppositions, Farabundo Martí National Liberation Front (FMLN), has filed a lawsuit seeking to upturn the bitcoin law by the current administration.
FMLN legislator, Jaime Guevara, led the suit with other citizens. One of the plaintiffs, Óscar Artero, described the bitcoin law as lacking in legal foundation. He also said that the law failed to consider the significance and harmful effects that it will have on the country.
El Salvador’s bitcoin adoption plans hit a major rock on June 17, when the World Bank refused to offer its assistance with the adoption process. Although the government stressed that the cryptocurrency is not replacing the US dollar as legal tender, the World Bank says the cryptocurrency has environmental and transparency shortcomings.
Recall that authorities in the US recently opened an investigation into the operations of Binance to fish out those who are using it to launder money in the States. There have been cases where cryptocurrency has been used for illegal transactions including holding digital records of popular companies like the Colonial Pipeline to ransom.
The challenge around the transparency of transactions is one of the reasons which El Salvador’s citizens also cited for their concerns about bitcoin adoption.
The reticence of the World Bank, as well as a large percentage of El Salvadorians, means that the grand plans to promote the crypto as the country’s fiat may fail to get a solid foothold. Bitcoin prices have continued on a downward turn as prices fell below $30,000 today going as low as $29,880. At the time of writing, it is trading slightly above $31,000.
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