Bitcoin adoption is not enforced at small merchants in El Salvador, but is designed to ensure “freedom of choice” for customers in large stores.
El Salvador’s President Nayib Bukele has clarified that the country’s Bitcoin law only mandates the adoption of Bitcoin by large companies, rather than small merchants. When the law went into effect, the controversial Article 7 had not actually been implemented to anyone.
The nature of Article 7
The Bitcoin law — which made Bitcoin legal tender in El Salvador last September — included a specific provision that proved controversial even among Bitcoiners. “Every economic agent must accept bitcoin as payment when it is offered to him by the person acquiring a good or service.” read an English translated version of the text.
However, a law only has meaning if it is enforced. In a recently released interview, President Bukele clarified that the provision only applies to large companies. “The little guy – he can do whatever he wants,” he said.
Bukele stated that the law was not even enforced — nor were there any plans to enforce it any time soon. However, it does offer the possibility of enforcement against “big companies” or “big banks” if necessary.
Many within the crypto community — from CoinMetrics co-founder Nic Carter to Ethereum co-founder Vitalik Buterin — criticized Article 7 at its disclosure for being “contrary to the ideals of freedom.” Alternatively, Bukele believes the item gives the average customer more freedom to choose which currency to purchase products in.
“You can not [this law] without going to work,” he explained. “You have to create an environment where their Bitcoin is accepted as a means of payment by the big companies.”
Bukele’s interviewer Peter McCormack found that the Bitcoin law had its intended effect on the ground in El Salvador. While major stores like Starbucks and Walmart were ready to accept Bitcoin on September 7, few small merchants in the San Salvador market were prepared at the time.
Articles 8 and 12
The president also stressed that Articles 8 and 12 of the Bitcoin law mitigated the overly mandatory implications of the legislation.
The former runs state-provided alternatives for merchants who accept Bitcoin to automatically convert their holdings into dollars if they wish. The latter stipulates that traders without the technological capacity to accept Bitcoin are excluded from Article 7.
When passed, polls indicated that a vast majority of Salvadorans disapproved of the Bitcoin law. Nevertheless, the state-provided Chivo wallet accumulated more active users than any Salvadoran bank in three weeks.