TL;DR Breakdown
- El Salvador to discuss paying salaries in Bitcoin
- Why country should not pay in BTC
After making history as the first country in the world to make Bitcoin a legal tender, El Salvador is discussing whether companies should pay salaries in Bitcoin.
This is according to local sources in the country. Local radio station 107.7 Fuego. They tweeted that three government ministries were considering the possibility of companies’ workers receiving their wages in BTC.
The radio station quoted Minister of Labor, Rolando Castro.
Castro reportedly said that the decision to pay salaries in Bitcoin will come after Bitcoin’s legal tender status becomes law. Its use as legal tender will begin 90 days after the law was created, with the Bitcoin-dollar exchange rate set by the market.
The Ministry of Labour is working with the Ministries of the Economy Finance to thoroughly analyze the decision.
El Salvador’s adoption of the leading cryptocurrency continues to advance rapidly as the government is also planning to mine Bitcoin with energy from volcanoes. The president called on the state-backed geothermal power company to make facilities available for BTC miners.
Critical opposing view on El Salvador paying Bitcoin-salary to workers
The country’s President, Nabiy Bukele who is bullish on Bitcoin has said that adopting the digital asset as a currency would help its citizens and boost the economy.
Critics, however, made a strong point that the volatility of bitcoin could affect employees greatly. Citizens will be keen to avoid losses due to Bitcoin’s occasional heavy fluctuation.
The primary contention is the volatility, as one of the clauses in the law states that the market will freely establish the exchange rate between bitcoin and the dollar. Other countries have also noted this problem, but El Salvador is the first that will be attempting to tackling the issue.
The small country has taken a giant step to change many things with its Bitcoin adoption. El Salvador will have to rework several aspects of the economy to fit the new currency.
