With electronic transaction - and especially bitcoin - the government knows what goes in and out since every transaction is traceable. And with that info, they will be able to properly tax you ! The goal of El Salvador here is to fight rampant tax evasion by providing a fully traceable payment system. Unsurprisingly, people are resisting that by using the best way they know how: untraceable cash transaction and bartering.
El Salvador tracks cash transactions.
Originally, like everywhere, only large transactions were registered.
But in the mid 2010s some laws and regulations were updated then interpreted in a way that required businesses to start registering transactions in in a more detailed way.
So for some years every purchase over US$ 100 has required an ID. in practice the threshold is lower though.
For example in banking transactions even depositing a one cent coin is linked to an ID card. Previously the threshold was $500.
Utility companies do something similar too, like registering not only the account holder name, but also the ID and name of the person who pays the utility bill for any amount. So paying a $2 water bill with coins requires and ID.
A new reporting requirement was added last year, in which businesses and 'tax-contributors' are required to upload every month to the Tax Ministry a CSV containing all transactions with other tax-contributors.
So if Alice's Medical Supply Store sells $5.00 to Bob the Doctor, the Tax Ministry will expect Alice to report in an individualized way the sale to Bob, and to Bob to report the purchase to Alice. Including their IDs, amounts and invoice numbers.
It is still not required to report the ID of sales to 'final consumers', but the change is just one CSV column away from happening.
Well, that's pretty terrible.
How hard was it for a middle aged farmer to actually download and set up the app to get $30 out of it?
And to your point, how many citizens are using cash primarily because its untraceable? When people say they prefer cash, The journo should have followed up with 'why'?
I suspect one of the larger reasons this failed is due folks above age 40 not given it a shot because of how complex it all is to use for them.
The government sponsored bitcoin wallet is easier to use than the banking apps.
For a normal Salvadoran most of the day to day transactions are micro transactions.
$0.25 loaf of read, $0.21 bus ticket, $1.00 groceries. For those amounts, handing a coin is faster than scanning a QR code.