Traditional financial analysts denigrate the plans to introduce Bitcoin (BTC) by El Salvador’s President Nayib Bukele – while a Paraguayan congressman says he will be unveiling the BTC law with a parliamentary doctor this week.

Paraguayan Congressman is due to propose BTC law this week

One of the loudest among Latin American lawmakers who vowed to post Bukele-style laws in their country said its own BTC law would be passed this Wednesday. Last month, Carlos “Carlitos” Rejala announced that he had started “work on an important project” related to the introduction of BTC that will help renew Paraguay for the world. “

But in a Twitter post, Rejala claimed he had the support of Fernando Silva Facetti, a longtime senator from the True Radical Liberal Party, the second largest party in the Paraguayan Senate.

Rejala declared in English that he was “here to unite Paraguay,” adding:

“That is why we decided to present the Bitcoin law together with Senator Facetti on Wednesday, July 14th.”

“Stay tuned because there will be a big surprise for Paraguay and the world. Something big is coming, ”he added.

Rejala’s Hagamos party has two MPs in the lower house and two senators. Both houses are dominated by the ruling Colorado Party, with neither party considering the bill. However, that could change on Wednesday when the bill is released.

In a separate post, Facetti wrote:

“Paraguay must adapt to the new digital world and establish itself as a focus of the energy transition for digital investments.”

He added that “the crypto industry needs to be regulated to provide legal, financial and fiscal security and to put in place control and oversight mechanisms”, arguing that cryptocurrencies are “commodities that must contribute to our financial balance.”

JPMorgan still has many doubts about the introduction of Bitcoin at ElSalvador

BTC is only a few weeks away from officially becoming legal tender in El Salvador in September. Despite some objections to the proposal, Bukele has almost full control of the house during the flipping attempt. It seems to have failed against the law at the Constitutional Court.

At the same time, analysts at JPMorgan have asked questions about the suitability of BTC as a means of payment and could raise liquidity concerns, according to Bloomberg.

“Daily settlement activity in El Salvador will represent about 4% of the recent on-chain transaction volume and more than 1% of the total value of tokens transferred between wallets over the past year,” the analysts said.

They are quoted as saying that illiquidity and the nature of the volume change forecast “potentially” could be “a significant limitation on the potential of Bitcoin]as a medium of exchange.”

However, the authors did not mention that El Salvador would use the Lightning Network (LN) or a second-tier BTC scaling solution to spread Bitcoin payments as widely as possible in the US country. Latin, with potentially infinite transactions per second LN.

In addition, according to the analysts, the high volatility of BTC will be a challenge “in a bio-currency system combined with official dollarization”. And the authors conclude that the persistent imbalance in demand for Bitcoin USD transactions on the state-run platform could “eat up the liquidity of the domestic dollar” – which could lead to “financial and balance of payments risks”.

And they added that recent polls suggest there is “widespread skepticism and reluctance” to use Bitcoin as a medium of exchange.

More than three-quarters of the Salvadorans surveyed were skeptical about whether BTC was recognized as legal tender in the country, Reuters reported last week, citing a nationwide survey of 1,233 people. It turns out that around 54% of respondents see the Bitcoin introduction as “not right at all”, while a further 24% describe it as “just a little bit right”.

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