El Salvador will create history tomorrow September 7 when the bitcoin law will be enacted and this is something that will have both positive and negative effects in the country. Perhaps other countries will have to monitor El Salvador for a while before taking their own decision.
What are the Positive Effects the adoption will bring to the country ?
Outside the fact that every citizens who have downloaded the country's cryptocurrency wallet , CHIEVO will be able to get $30 worth of bitcoin. The country on their own part which make much return from the fees generated from the app. Citizens will be free from the traditional centralized system of Finance and can be able to capitalize on volatile of cryptocurrency to grow their wealth.
They will likely see huge return on their bitcoin purchase because bitcoin seems to have broken the feared September downtrend.
Considering the fact that part of the bitcoin law also encourage citizens to use the country's wallet, fraudulent activities in the wallet can be discovered and the defaulters caught. The choice to use bitcoin among all other cryptocurrency is something good because bitcoin is built as an open blockchain , thus suscipicious transactions can be tracked as opposed to privacy blockchains.
What are the possible negative effects this adoption will bring ?
First of all, they are the first country to implement such law and as such it is bound to face challenges over time.
Some of the citizens have been protesting against the bitcoin law and will likely create a chaotic environment tommorow.
The Consumer Protection Law which aims at punishing businesses or individual that refuses to accept bitcoin payment is something that can cause issues in the country. People who are not comfortable with bitcoin or lacks the knowledge to handle the Volatility of bitcoin will likely face challenges with the adoption.
The country itself is already in enmity with the International Monetary Fund ( IMF) because they went against their warning to make bitcoin a legal tender. The President of El Salvador seems not be bordered and this reluctance in coming to a neutral ground with IMF will affect the country in the Global Market.
The fact remains that El Salvador failed in some aspects. First, cryptocurrency is something that is a bit new to some people in the country and as such , their first priority should have been EDUCATION. The $30 encouragement fund may not be profitable if the citizens are not well educated on things like gas fee, entry and exit point , stop loss and the rest.
The bitcoin ATM machine installed in the country will not work like the traditional ATM used for the fiat currency and as such demands that the people should be guided on it ,especially the fact that they may have to stay longer time in the ATM due to delayed blockchain confirmation.
Being something that is being tested for the first time, it could have been better if the citizens are not compelled to accept the process atleast for the first year , so that the system will be tested and it's efficiency or inadequacy known before putting it up as a legal tender.
Nevertheless, their adoption will actually favour the cryptocurrency market because there is going to be more daily transaction in bitcoin. Early today, there were tweets suggesting that people should buy the same $30 amount promised to El Salvador citizens as a way of showing support to the first country to make bitcoin a legal tender. My only concern is on the poor masses, those who will not have enough money to throw away as gas fee, they have to stick to the stable coin for their transaction and this will only be possible if the nation's wallet support it.
This means that the citizens might end up losing half of their salary on fees.
Well, the day is here and we can only watch from wherever we are because their success or failure is important to the cryptocurrency world.