Well it's officially official; El Salvador has become the first nation state to put bitcoin on their balance sheet and, at the same time, made bitcoin legal tender within the country. We wrote about the significance of this in June when the news of the Bitcoin Law first dropped. However, it is still a bit shocking to see it become official. Especially when it comes with the President of El Salvador openly mocking the IMF while bragging about buying the dip during a $10,000 flash crash.
I don't think the magnitude of this open trolling of the IMF should be understated. The IMF is an institution that has ravaged countries across Latin America, Africa and Southeast Asia with predatory loan practices. To see the leader of a nation state stand up and openly ridicule the IMF so publicly may be looked back on as a pivotal moment in Bitcoin's rise to monetary dominance.
Bukele, regardless of how you view his tactics as President of El Salvador, has shifted the Overton Window a bit, which may embolden leaders from countries similar to El Salvador to speak out in open opposition to the old guard of opaque banking as well. They may be even more inclined to do so after they see that rolling out a bitcoin strategy can be done. Earlier today legendary bitcoin journalist Aaron van Wirdum tweeted about his experience buying McDonald's with bitcoin over the Lightning Network.
McDonald's is accepting bitcoin. It's doing it because it has to if it wants to do business in El Salvador, but it's doing it nonetheless. And just from perusing Twitter today, it appears that Starbucks and Pizza Hut are two other multinational chain corporations that started accepting bitcoin in El Salvador today because of the law that just went live.
In a private chat today, a friend highlighted that this is a great example of the intolerant minority forcing the hands of the majority. El Salvador is a country ~6.5 million people. Not really that big when compared to some cities throughout the world. But the fact that El Salvador is a sovereign nation who can make its own laws means that companies who want to do business there have to obey their laws. As more and more nation states adopt bitcoin as legal tender and make similar laws, these multinational corporations will HAVE to have a strategy to accept bitcoin. Wild when you think about it. And even more wild when you couple the possibility that we may be entering an era during which emerging economies openly mock institutions like the IMF, World Bank, and BIS while turning to Bitcoin as their preferred monetary network.
We shall see which domino falls next. And make no mistake, there will be a next one and many many more behind it.
It's that time of year on my village by the sea that you have to leave the island to find good cold brew.