←back to thread

El Salvador abandons Bitcoin as legal tender

(ticotimes.net)
927 points smallerfish | 5 comments | 04 Feb 25 00:00 UTC | HN request time: 0s | source
Show context
Mengkudulangsat ◴[04 Feb 25 00:11 UTC] No.42925325[source]▶
> The government, she assured, will continue buying bitcoin and having reserves in this cryptocurrency

Sounds like the term "Failed Experiment" is the writer's assertion and not the government official position.

replies(10): >>42925341 #>>42925352 #>>42925429 #>>42925453 #>>42925471 #>>42925524 #>>42926129 #>>42926578 #>>42927646 #>>42931154 #
cwillu ◴[04 Feb 25 00:26 UTC] No.42925524[source]▶
“Another change makes using bitcoin entirely voluntary. (Previously, the law mandated that businesses accept bitcoin for any goods or services they provided.) Additionally, bitcoin can no longer be used to pay taxes or settle government debts.”

--https://reason.com/2025/02/03/el-salvador-walks-back-its-bit...

Sounds pretty failed to me.

replies(2): >>42925557 #>>42929279 #
desumeku ◴[04 Feb 25 00:29 UTC] No.42925557[source]▶
They did this to receive a loan from the IMF. The IMF was withholding the loan because of BTC and would not disburse it until they got rid of its status as legal tender.
replies(6): >>42925576 #>>42925736 #>>42926019 #>>42926571 #>>42928110 #>>42929427 #
1. jimkleiber ◴[04 Feb 25 07:54 UTC] No.42929427[source]▶
How many people in the Bitcoin community actually think a predictably deflationary asset is good to use as a currency?
replies(1): >>42929629 #
2. ball_of_lint ◴[04 Feb 25 08:20 UTC] No.42929629[source]▶
https://en.wikipedia.org/wiki/Argumentum_ad_populum

I'd much prefer a small amount of deflation to the massive inflation that USD is currently undergoing. And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable.

replies(3): >>42929873 #>>42930212 #>>42931285 #
3. consp ◴[04 Feb 25 08:50 UTC] No.42929873[source]▶
> And furthermore I think our economic system which encourages young people to take on debt in order to have niceties such as housing and transportation is massively exploitative and unsustainable.

Deflation will kill that. Your loan will cost more over time instead of less. The assumption with inflation is loans will follow it. With deflation and loans not following then people who bought into the system might be well off but those who are not yet in are worse. Same thing with inflation and loans not following as is happening now.

4. jimkleiber ◴[04 Feb 25 09:31 UTC] No.42930212[source]▶
From my (maybe naive) understanding of current economic theory, it's that a small amount of inflation is what grows an economy. And an important part of that is unpredictable levels of inflation/deflation.

So I'd assume a small amount of predictable deflation would shrink an economy.

Anyone know more about this?

5. graemep ◴[04 Feb 25 12:02 UTC] No.42931285[source]▶
High inflation discourages high debt.

High inflation effectively front loaded loans that had fixed repayments (such as mortgage repayments) and the high interest rates that went with them (they move togeter - its called the Fisher Effect - https://moneyterms.co.uk/fisher-effect/ ) meant lenders were willing to lend a much lower multiple or income.

In most places (and definitely in the UK) house prices were much lower relative to incomes when we had 10% annual inflation.