Salvadoran Opposition Declares Bitcoin Legalisation Unconstitutional

The law recognising the first cryptocurrency as a legal means of payment could be unconstitutional and harmful to El Salvador. This view is laid out in a lawsuit filed by a group of citizens, the newspaper El Mundo reports.

The initiator of the lawsuit was Jaime Guevara of the opposition Farabundo Martí National Liberation Front party.

According to civil plaintiff Oscar Artero, authorities have not developed a sufficient legal framework to recognise digital gold as a means of payment.

“The Bitcoin law is needed to fleece people’s pockets; it is tax-exempt, they want to force us to trade,” Artero said.

The plaintiff expressed hope that his position would be supported by the Constitutional Chamber of the Supreme Court. He did not specify which provision of the document contradicts the country’s constitution.

According to a survey by the Salvadoran Chamber of Commerce and Industry, eight in ten residents oppose payments in the first cryptocurrency.

Back on June 9, 2021 the authorities recognised Bitcoin as an official means of payment in El Salvador, alongside the US dollar.

The initiative did not find traction among local remittance services — only some integrated support for digital gold.

ForkLog experts reached the view that the adoption of cryptocurrency could equally spur both an inflow of investment into El Salvador and capital outflows.

According to JPMorgan analysts, the decision could threaten relations with МВФ, on which El Salvador’s economy depends. IMF spokesperson Gerry Rice said that cryptocurrency legalization could entail a number of risks and regulatory issues.

The Central American Bank for Economic Integration announced its support for El Salvador in the matter of implementing Bitcoin. The World Bank refused to help the country, citing environmental and transparency concerns.

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