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Weekly Report - 16 September 2021 (WR-21-37)

EL SALVADOR: Bitcoin gamble begins

The contentious new law implementing cryptocurrency bitcoin as legal tender in El Salvador has taken effect. Many consider the move risky given bitcoin’s use for highly speculative purposes, its volatility, and concerns that it could facilitate money laundering [WR-21-24], not to mention the doubts it casts over El Salvador’s ability to strike a financial arrangement with the International Monetary Fund (IMF) and the impact on its image abroad. Crucially, the protests which met the entry into effect of the new law – among the biggest since President Nayib Bukele took office in June 2019 – suggest the move could take a toll on the high popularity of the head of state.

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