Bitcoin has officially been adopted as a legal tender in El Salvador, which is now the first country in the world to do so. Following the adoption, Bitcoin has seen nearly a 10% drop in its price. However, enthusiasts and analysts anticipate it will soon surge once again.
Since the Bitcoin law has now been officially implemented, Bitcoin transactions must be accepted by businesses in the country. The merchants can choose between receiving BTC or USD at the time of settling transactions.
However, is it mandatory for merchants to accept BTC transactions? Would the businesses be affected if the merchants decide otherwise? Let’s find out.
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What Can Happen if Merchants Do Not Accept BTC Transactions?
There are several major points in the Bitcoin bill to be implemented in El Salvador. One of the highlighting points in the bill is the adoption of BTC transactions by the merchants.
The Bitcoin law took effect yesterday as planned by the Salvadoran government. The day before the implementation, Javier Argueta spoke about how businesses will work under the new law.
Argueta is the legal counsel to the Presidential House of El Salvador. He stated in an interview that the businesses in El Salvador will be instructed to accept Bitcoin as payment from the customers. The merchants will have the liberty to choose whether they want BTC or USD when the transaction is settled.
However, they need to have electronic wallets, to receive the payment from the customers.
An excellent option for the merchants is the Chivo wallet, backed by the government. The users can process the transactions in both BTC and USD with the help of this wallet.
The merchants can also automatically convert the Bitcoin that they receive into U.S. dollars, through the Chivo wallet.
However, Javier Argueta also stated the consequences merchants would ultimately face if they refused to accept BTC as payment.
Argueta added that refusing to accept BTC violates local regulations, which is why all the businesses in the country are obliged to accept Bitcoin transactions.
Even though the law or the regulations do not clearly state it, a business that does not operate accordingly will be exposed to “referrals of infractions to the Consumer Protection Law.”
How is the Bitcoin Law Likely to Affect the Digital Asset?
The Bitcoin law in El Salvador has been quite controversial ever since it was proposed by President Nayib Bukele. The implementation of the law was opposed by many individuals in the country. However, the law is now in effect as planned and how it impacts the economy of El Salvador and the digital asset will be evident with time.
Bitcoin is the flagship crypto asset in the world and has an unmatchable significance. It experiences fluctuations in price, however, its value remains the same.
The price of BTC has noticeably dropped, in the last 24 hours as seen in this graph by CoinGecko.
Despite such a prominent price drop, enthusiasts are still optimistic regarding the future of the crypto asset.
Therefore, if you have been planning on buying BTC make sure you go for some of the lowest fees Bitcoin exchanges.
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