Bitcoin Use Will Be ‘Totally Optional’ in El Salvador, Finance Minister Says

18 August 2021

The use of bitcoin and a digital wallet in El Salvador will be “totally optional,” and businesses that do not accept the cryptocurrency will not be sanctioned, El Salvador’s finance minister, Alejandro Zelaya, said Tuesday. 

In a televised interview during the program “Frente a Frente” hosted by journalist Moisés Urbina, Zelaya said the U.S. dollar will remain as the main currency of reference in the country, and will be the one which businesses, the government and all others will use for their accounting. 

Zelaya’s comments contradicted article 7 of the Bitcoin Law passed in June, which stipulated that bitcoin must be accepted as a form of payment by “every economic agent.”

Asked whether it was necessary to eliminate that article, Zelaya asked why and did not expand on the subject. 

El Salvador’s Central Bank did not clarify matters on Tuesday in a consultative draft with technical standards to facilitate the application of the Bitcoin Law. The draft stated that the institutions obliged to comply with these standards will be banks, cooperative banks and savings and credit societies “interested” in providing the service of convertibility of dollars and bitcoin and vice versa. 

In another document, entitled “Guidelines for the Authorization of the Operation of the Digital Wallet Platform for Bitcoin and Dollars,” the Central Bank of El Salvador stipulates that wallets will need to implement know-your-customer policies. 

“Clients of the digital wallet may be individuals and legal entities resident or not in the country that comply with the requirements and standards of know your customer and prevention of money and asset laundering, financing of terrorism and proliferation of weapons of mass destruction,” the document stated, adding that those requirements will be “established following the technical norms issued by the Central Bank for these purposes and the international treaties and conventions issued in this regard.”

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