<Anchor> This is a
friendly economic time. Today (9th), I will be with reporter Kim Hye-min. El Salvador, the name is a little unfamiliar, but it seems to be a small country, but they said that they recognized Bitcoin as the official currency?
<Reporter>
El Salvador is a small country under Mexico. With a total population of only 6.5 million, in June, the El Salvador government passed a bill recognizing Bitcoin as a legal currency for the first time in the world.
Originally, this country had the US currency as its own currency, but Bitcoin became the official currency from the 7th local time. Bitcoin can be used to buy coffee at a cafe or to pay taxes.
The El Salvador government has created an official digital wallet called 'Chibo' to encourage the use of Bitcoin. We are giving away $30 worth of bitcoins to citizens who sign up for Chibo.
In addition, about 200 Chibo ATMs have been installed across the country so that cash can be retrieved without commission. However, from the first day of implementation, it did not go smoothly.
The download itself did not work in the mobile phone app market because the number of downloaders was crowding at once. In addition, it is said that even if you deposit money at an ATM, it is not confirmed in Chibo.
<Anchor>
Some people say that there are quite a few people who are against it.
<Reporter> There
has been an error in the e-wallet Chibo from the first day. So, the opposition is said to have grown stronger.
There was an anti-Bitcoin protest with about 1,000 people attending, and the protesters claim that the government is pushing ahead unilaterally, even though it is risky and uncomfortable.
Opposition lawmakers also wore black to attend parliament in anti-Bitcoin.
According to Reuters, "nearly half of the people of El Salvador do not have Internet access."
So there are concerns that poor citizens will have a hard time using Bitcoin. Of course, not all people of El Salvador are against it.
Some see El Salvador's current dependence on the US dollar as a groundbreaking way for financial innovation and diversification.
<Anchor>
Reporter Kim, whether or not Bitcoin can play a role as a currency is very controversial and is the key. By the way, although El Salvador is a small country, if it was introduced as an official currency like this, the price would have risen a lot, but on the contrary, it fell?
<Reporter>
Until the day before, Bitcoin continued to rise. However, as soon as it was introduced as an official currency, it turned into a sharp decline, plunging at one point by up to 17%. In the aftermath of this, the price of other altcoins also fell.
Although it is positive that El Salvador adopted Bitcoin as a legal currency, it is already reflected in the market price, and on the first day of implementation, it is analyzed that it showed a downward trend as profit-taking properties poured in.
The El Salvador government has used the bitcoin decline as an opportunity to buy cheaply. As the price of bitcoin fell, the president announced via Twitter that he had bought an additional 150 bitcoins.
Also, the government had previously bought 400 bitcoins. So, now the total number of Bitcoin holdings has increased to 550, and as it is an asset with high price volatility, the risk of the national fiscal has also increased.
<Anchor> The
market also reacts quickly. However, as reporter Kim just explained, Bitcoin is not a bit stable. That is why there are many voices of concern from other international organizations.
<Reporter> There are
still more concerns than positive reviews. It could lead to blind spots in money laundering or foreign exchange regulations.
The International Monetary Fund (IMF) said, "It can cause numerous macroeconomic, financial and legal problems, so a careful analysis is necessary."
The World Bank also pointed out that there is "a problem with currency transparency". Credit rating agencies Moody's and Fitch also expressed concerns about making money laundering easier.
In fact, Moody's recently downgraded El Salvador's national credit rating, saying that the introduction of Bitcoin could further shake financial stability.
Still, the President of El Salvador has made it clear that he will not stop challenging himself, saying, "Every innovation requires a period of learning."
I wonder if it will be recorded as a reckless experiment in a 'small country' or whether other countries will make such a groundbreaking change that accepts Bitcoin as a legal currency.