On Sunday (2 January 2022), Salvadoran President Nayib Bukele gave his 2022 predictions for Bitcoin.
As you may remember, the bill to make Bitcoin legal tender in El Salvador got passed by the Legislative Assembly on June 9 and the Bitcoin Law became effective on 7 September 2021.
On 24 June 2021, President Bukele announced during a national address that the Bitcoin Law will become effective on 7 September 7 2021.
Here are a few highlights from thatspeech (as reported by “La Prensa Gráfica”, which is one of the country’s most popular daily newspapers):
- The English translation of Article 7 of the Bitcoin Law states: “Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.” However, the president said assured the people of El Salvador that “nobody has to receive bitcoins if they don’t want them”.
- Pensions and salaries will continue to be paid in U.S. dollars.
- Bank account balances will remain in U.S. dollars (i.e. not get converted to Bitcoin).
- The president pointed out that Article 7 of the Bitcoin law that those who do not have the technology to accept Bitcoin do not have to accept it. The English translation of Article 7 states: “Those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin are excluded from the obligation expressed in Art. 7 of this law. The State will promote the necessary training and mechanisms so that the population can access bitcoin transactions.”
- The government is building an electronic wallet called “Chivo” that will be able to hold both USD and BTC. This mobile app will be available for downloading from the iOS and Android app stores from September 7. Any El Salvador citizen who registers the wallet (which will require entering their Unique Identity Document number and cell phone number, as well as submitting to a face scan) can receive $30 worth of Bitcoin from the government (but it seems that they can choose to opt out and receive this amount in USD instead). The president said that “those 30 dollars are to promote the use of bitcoin and to encourage people to download the App”.
- The Chivo wallet will allow withdrawals at ATMs.
- The Development Bank of El Salvador (Bandesal) will guarantee automatic convertibility, which means that businesses that get paid in BTC can choose to receive USD.
Then, on 28 June 2021,
These were the main highlights:
- The Chivo wallet is “only one of many wallets that can be used” and will be “fully compatible with other wallets.”
- “The personal data requested by the wallet is already held by the Government.”
- “The use of the Chivo wallet will have no cost, there will be no commissions to send or receive remittances, or to make or receive payments, or to convert bitcoin to dollars or vice versa. No commission will be charged to merchants, as credit cards do. No commission will be charged to merchants…”
- “The money that is held or received (in dollars or bitcoin) in the Chivo wallet… can be withdrawn in cash (in dollars) at any time you want. It can be done at the physical branches … and at Chivo ATMs. This will have NO commission.”
- “There will be more than 200 Chivo points (between ATMs and branches) in historic centers and shopping centers… You can also make deposits, purchase of bitcoin and other services…”
As Cointelegraph reported earlier today, “since legalization, the president acquired 1,370 BTC for the country’s reserve and reinvested its unrealized gains into new infrastructure projects including a hospital and a school.”
Well, late yesterday (El salvador time), President Bukele took to Twitter to give his Bitcoin-related predictions for 2022.
Let’s take a quick look at some of his predictions:
Bitcoin price reaches $100K. He is not alone in believing this. On 24 December 2021, Thomas Lee, Co-Founder, Managing Partner and the Head of Research at independent research boutique Fundstrat Global Advisors, said during trading education firm Market Rebellion‘s roundtable event that he could see Bitcoin “easily getting to $100,000.”
Other countries are going to make Bitcoin legal tender. It’s not clear which countries he is thinking about, but if this prtediction is true, it is most likely to happen in a country with a weak ecnonomy, most likely one in Central America.
Bitcoin City. According to a report by Reuters, on 20 November 2021, President Bukele announced at the end of the Bitcoin Week conference in El Salvador that his nation wants to build the world’s first “Bitcoin City” (in the beginning, this will be funded by Bitcoin-backed bonds) in the eastern region of La Unión , and that this city would be powered by a nearby volcano (which is called Conchagua) and residents there would not have any taxes other than value added tax (VAT) to worry about.
He reportedly said:
“Invest here and make all the money you want… This is a fully ecological city that works and is energized by a volcano.“
Bitcoin 2022 Conference. As you may remember, it was on 5 June 2021 that Zap Solutions (a Bitcoin payments startup that uses the Lightning Network) Founder and CEO Jack Mallers — who helped with drafting El Salvador’s Bitcoin bill — announced at Miami’s Bitcoin 2021 conference that the small Central American nation was planning to make Bitcoin legal tender (alongside the U.S. dollar).
During his talk, an emotional Mallers presented a recorded video message from President Bukele and read out a small passage from the proposed bill.
Mallers went on to say that his firm would be opening an innovations centre in El Salvador with the help of Blockstream.
It is hard to imagine what surprise(s) the Bitcoin 2022 Conference will deliver, but is not inconcievable that a small Latin American or African nation could follow El Salvador’s lead and also adopt Bitcoin as legal tender.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.