El Salvador’s plans to adopt Bitcoin as legal tender certainly caused a splash, but the proposals were a little light on detail.
Now, the Central American nation’s secretary of commerce and investment has stressed that BTC will not replace the dollar’s role in the economy.
According to El Mundo, Miguel Kattán sought to assure the population, and said that the use of Bitcoin is merely an option for consumers and merchants, with transactions tied to the digital asset’s value in U.S. dollars. He was quoted as saying:
“What the law is going to say at the end of the day is that it can be paid — if the one who is charging accepts the Bitcoin and the one who is paying wants to do it with Bitcoin — there is no difference from what we have today.”
And he went on to stress that El Salvador will introduce regulations that are designed to prevent money laundering.
According to a Reuters report, El Salvador’s plans could complicate its efforts to secure a $1 billion program with the International Monetary Fund.
Siobhan Morden of Amherst Pierpoint Securities was quoted as saying that the announcement at the Bitcoin 2021 conference “shows lack of coordination with impulsive announcements that contradict a cohesive economic plan.”
Other challenges pointed out concern the fact that El Salvador might find it more difficult to raise tax revenue in future, something that has taken on newfound importance worldwide following the unprecedented levels of spending triggered by the coronavirus pandemic.