 The Bitcoin system is so perfect that I think it's going to be the future. For me it looks bulletproof. I'm pretty sure this is going to work, not only for us, but for humanity. The legislative assembly of El Salvador approved a law that will give Bitcoin the status of national currency. The country's president and main proponent of the bill, Naid Bukeli, is convinced the adoption of Bitcoin will bring financial prosperity to the country. In the short term, this will generate jobs and help provide financial inclusion to thousands outside the formal economy. The thing is that since we don't understand it right now, we don't know how we can overcome it. We can go down. Well, it's going to be something new for everyone and I think it's going to be a little difficult. I don't think it's going to be good because to start people don't know it and it's The Bitcoin law has sparked widespread concerns. Critics say that at best the bill won't improve Salvadorans' lives. At worst, it could wreak havoc on the country's fragile economy. We tried to figure out what the Bitcoin law actually means for El Salvador and its people. Since 2001, the United States dollar has been used as the official currency in El Salvador. But starting from September 7th, 2021, Bitcoin will join the dollar as legal tender. That means citizens will be able to use dollars or Bitcoin to purchase goods and services and pay taxes and debts. Traditional cash and digital currency functioning side by side. A monetary experiment the first of its kind. So why does President Bukeli want another currency for El Salvador? Seventy percent of Salvadorans don't have access to a bank account and fully rely on cash. Bitcoin could provide these people with a fast and cheap way to transfer money with no third parties involved. This is particularly important in El Salvador, where one-fifth of the country's GDP depends on remittances from expatriates working abroad. When you send remittances from the U.S. or any other country to El Salvador, you pay a commission which can go as high as 20-25 percent. And we expect this to be lower when sending money through some Bitcoin exchange. Given its new status as a currency, Bitcoin won't be subjected to capital gain taxes in El Salvador. Additionally, the government will grant residency to crypto entrepreneurs investing in the country. Bitcoin proponent and podcaster Peter McCormick visited El Salvador after the law was implemented and is optimistic that the bill will transform the country into a Bitcoin haven. I would expect to see an increase in investment in the country from Bitcoin companies. So that's going to increase the GDP in the country and that's going to increase the job supply. The adoption of the Bitcoin law is highly controversial. Critics say Bitcoin's high volatility makes it unsuitable as a form of money. The cryptocurrency has been known to lose 40 or even 50 percent of its value in just a matter of days. The former head of El Salvador's central bank warned that if Bitcoin becomes an integral part of the local economy, a sudden price crash would pose a huge risk to the country's financial stability. The political opposition in El Salvador sees the Bitcoin law as part of an authoritarian trend that has marked Bukele's presidency. They say the Bitcoin law was approved too quickly and without the necessary consultations. Most of the criticism of the law is focused on Article 7, which requires all economic agents to accept Bitcoin if it is offered as payment. The compulsory nature of this article sparked concerns among members of the crypto community. Professor of Economics and early Bitcoin supporter George Selgen thinks Article 7 should be repealed for this reason. If governments compel people to use something as currency, they can make them use anything as currency. They've been doing it for a long, long time. That's how we got fear. If Bitcoin only wins a victory of being widely adopted by taking advantage of coercive measures like Article 7 of the present Salvadoran law, that's going to be a very hollow victory. But supporters of the law have brushed off these concerns. As President Bukele pointed out, while merchants will need to accept Bitcoin, they are not forced to hold it. He also said a dedicated government fund will be created to allow the instant exchange of Bitcoin into dollars. Other analysts even say that Article 7 is necessary to make the law effective. From an economic point of view, if you don't guarantee that some sort of money will be accepted, then probably it won't be demanded. It won't be accepted. So you have this chicken and egg problem, is whether people start accepting this and then it becomes popular or where you force them, and then of course it will become popular. The idea of making Bitcoin a means of exchange is not totally new in El Salvador. In the small coastal town of Elzonte, Bitcoin has already been used as a currency for a couple of years. Here, locals use Bitcoin apps to buy goods and services and even pay salaries. Rosalina Franco, the owner of a local grocery store, was among the first merchants to embrace the new currency. I asked him when he came to tell me if that currency was accepted and he asked me to change it later. How will my phone fall? The experiment of Elzonte started in 2019, when an anonymous donor from the US started sending Bitcoin to local nonprofits. The donor's goal was to create a sustainable Bitcoin economy in Elzonte. Since then, local merchants have largely profited from the Bitcoin price surge in late 2020. Extending the experiment of Elzonte to a country of 6.5 million people won't be an easy task. That penetration in El Salvador is among the lowest in Latin America. Most people lack education about crypto and blockchain technology. A recent survey shows the majority of local entrepreneurs are highly skeptical of President Bukeli's Bitcoin law. To encourage the adoption of Bitcoin, 1,500 Bitcoin accounts will be installed all over El Salvador. President Bukeli also announced $30 worth of BTC will be airdropped to all adult citizens. For this purpose, $120 million of state funds will be transferred to 4 million new Bitcoin accounts. To receive this money, people will have to download a government wallet, which, according to Bukeli, will enable instant conversions of Bitcoin into dollars without any fees. President Bukeli's plan is ambitious. Can he put in place the necessary infrastructure to generate meaningful Bitcoin adoption in El Salvador? Despite the challenges ahead, the Bitcoin community remains optimistic about the opportunities this law could create. I wouldn't even call these things barriers, because they're things in the way. I would just call them speed bumps, challenges, things I have to be dealt with. People have been willing to cry and experiment with this, and the experience seems to have been at least partly successful. In the following months, El Salvador will be a crucial testing ground for Bitcoin. In the eyes of the people, the cryptocurrency's usefulness has yet to be proven. And if mishandled, its introduction into the economy could cause significant financial stress. But if Bukeli's plan succeeds, millions of people may benefit from a decentralized censorship-resistant monetary system. And who knows? Other countries could follow its example. Will El Salvador be the spark that ignites the Bitcoin revolution across the globe? Here at Cointelegraph, we'll be following these events very closely. So stay tuned.