Using bitcoin as legal tender
WHEN ASKED if anyone has tried to use bitcoin to pay her, a woman selling coffee and pastries in San Salvador, the capital city of El Salvador, replies “thank God, no”, and rebuffs an attempt to do so. A man selling soup for lunch brushes off the idea with laughter. By dinnertime, low on phone battery and morale, your correspondent is pointed to a bar called Leyendas where the logo for Strike, a digital bitcoin wallet, adorns the walls. But the attempt to pay with bitcoin is met with confusion. The bar’s owner, who controls the wallet, is missing. A few frantic texts later he sends his wallet address. At last, 26,618 Satoshis (one hundred millionth of a bitcoin), $12.50-worth, are swapped for beers.
On September 7th bitcoin will become legal tender in El Salvador, alongside the dollar. The Central American country of 6.5m people is the first to attempt such a feat. A week before the big day those who had put plans in place to use bitcoin were the exception, rather than the norm. Three-quarters of Salvadoreans surveyed in July by Disruptiva, a polling firm, were sceptical of the plan to adopt bitcoin. Two-thirds were not willing to be paid in it and just under half knew nothing about it. Both the World Bank and the IMF have warned against adoption, citing the potential impact on macroeconomic stability and bitcoin’s environmental costs...