Reportedly,Nayib Bukele, president of El Salvador, expressed that he intends to make Bitcoin (BTC) Legal Tender in his country. Speaking at a BTC conference in Miami, the 39-year-old said adopting the cryptocurrency will have both short- and long-term benefits.

Onlookers were like:  The spectacle of Bitcoin fans celebrating the prospective granting of legal tender status to it by El Salvador’s authoritarian President (he only just extended his executive authority over the country’s central bank) must have F.A. Hayek rolling in his grave!

*For example, in Scotland there is no such thing as legal tender. Yet both Scottish banknotes and (less frequently) Bank of England notes are routinely accepted in payments there. On the other hand, although U.S. Notes (“greenbacks”) were made legal tender during the Civil War.

They were only accepted at a discount on the west coast, where gold remained the preferred medium of account and exchange.

Isn’t the bigger news that BTC will be held as reserves?

Others were like:  And in any event, I think the celebration is just a step towards adoption. If BTC is to become a true medium of exchange (or even just a globally accepted store of value) there will have to be a number of interim steps, right?

Clearly you don’t understand what motivates Bitcoiners. We want Hyper-bitcoinization. Countries adopting Bitcoin and holding it in their treasuries is the biggest step to get there. Of course we’re celebrating this. But it doesn’t mean we approve of any existing policies.

Community Musings:

Does it really matter whether the state is authoritarian or not? In the long run Bitcoin would progressively erode state control. So, authoritarian regimes adopting it would be a good thing. You will be excluded from the vast majority of the economy within 10 years. All the money flows will be the global Native Internet money, known as bitcoin. Remember this comment!

To be clear, you think, given 70% of the population is unbanked, and being on-boarded to remittances (20% of GDP) running on bitcoin rails at a clip of 20k/day, to negligible fees vs. current 30-50% is a *bad* thing?

I figured you would protest when a government finally and inevitably would do this. Here’s the thing: this thug can’t control Bitcoin. He’s motivated by short-term narcissistic incentives. Long-term, this empowers and protects the people.

Japan made bitcoin legal tender years ago. Nobody uses it as such because it’s volatile, unscalable, expensive and difficult for end users. Not to mention no customer service, refunds, recurring billing etc.