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El Salvador: an analysis of the monetary integration law and the bitcoin law

Author

Listed:
  • Sergio Luis Náñez Alonso
  • Miguel Ángel Echarte Fernández
  • David Sanz Bas
  • Cristina Pérez Rico

Abstract

The objective of this article is to analyze the two most important monetary lawsthat have been implemented in El Salvador, namely the Monetary Integration Law (MIL)and the Bitcoin Law. The most important articles of both laws will be analyzed, as well asthe consequences of dollarization, and the possible advantages and risks associated with theadoption of Bitcoin as legal tender. Although this measure may have some positive aspectsby encouraging financial innovation and facilitating remittances, the macroeconomic riskis very high due to the volatility of this cryptocurrency. So far no positive results have been achieved as the acceptance has been very low and there has been a depreciation of the assetin recent months. JEL Classification: E40; E42; E44; E52; E58.

Suggested Citation

  • Sergio Luis Náñez Alonso & Miguel Ángel Echarte Fernández & David Sanz Bas & Cristina Pérez Rico, 2024. "El Salvador: an analysis of the monetary integration law and the bitcoin law," Brazilian Journal of Political Economy, Center of Political Economy, vol. 44(1), pages 189-209.
    • Handle: RePEc:ekm:repojs:v:44:y:2024:i:1:p:189-209:id:2449
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    More about this item

    Keywords

    Dollarization; volatility; currency stability; remittances; inflation; cryptocurrency;
    All these keywords.

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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