El Salvador was the first country in the world to adopt bitcoin; allocated more than 200 million dollars for its implementation.
The use of bitcoin as legal tender in El Salvador celebrates two months, a period marked by the controversies that it dragged from the beginning, the low acceptance between informal trade and the “profits” left to the Government by an upward streak in the price of crypto asset.
El Salvador was the first country in the world to adopt bitcoin And, despite the financial problems it has to cover its own annual budget, it allocated more than 200 million dollars for its implementation.
In these two months, hundreds of complaints of identity theft also emerged in the government wallet, the Chivo Wallet, to collect a $ 30 bonus, and all information related to bitcoin purchase operations with public resources was declared secret.
Thousands of Salvadorans have protested against the Government of Nayib Bukele and the initiative, which has become one of the main economic bets of the Executive.
Calls continued to reform the Bitcoin Law so that its use is optional and not mandatory.
Rejection and operability problems
The economist and former president of the Central Reserve Bank (BCR) Óscar Cabrera told Efe that “the population continues to reject the use of bitcoin as legal tender, which is confirmed by several surveys that have been published lately ”.
He indicated that the low-income population downloaded the government wallet “only to use the $ 30 to buy goods and services” and “not to enter the world of bitcoin, invest and see what happens because their economic conditions do not allow it.”
“What I am seeing is that the dollar is always going to be considered as legal tender by Salvadoran households and microenterprises” and the expected massive use “has not resulted,” he said.
Cabrera said that during these two months there have also been “serious operational problems in the wallet, which has led to theft or identity theft”:
“I believe that many analysts anticipated that the poor financial literacy of the Salvadoran population and the insufficiency of consumer rights would increase operational and cyber risks in homes and in micro-businesses that will use the Chivo Wallet and time has proved us right “, he said.
For the director of the Citizen Action organization, Eduardo Escobar, “one of the main deficiencies in the adoption of bitcoin is the lack of transparency throughout the process.”
“Everything that has to do with the implementation of bitcoin has been dark, opaque,” he told Efe.
The state-owned Development Bank of El Salvador (Bandesal), which manages 150 million of the bitcoin fund, refused to reveal the information about the operations carried out in bitcoin and protected its decision to bank secrecy.
Truncated advantage and new cryptocurrencies
After the adoption of bitcoin, in the country groups on social networks that promoted its use and speculation through “scalping” multiplied.
The Chivo Wallet, unlike other electronic wallets, kept the price frozen for a minute and this allowed users to have an advantage to make a profit by buying and selling bitcoin.
“Doing it with a frozen rate, comparing it with exchanges in real time is a type of ‘fraud’,” the company Chivo published on Twitter after eliminating the option to keep the price frozen.
This decision generated various criticisms among its users, who began to value the option of using other wallets and have also ventured to trade with other cryptocurrencies, mainly “shiba inu”.
This cryptocurrency has experienced steep price increases, but it is among the most volatile.
The alleged earnings
President Bukele recently announced the construction of a veterinary hospital with the “profits” obtained from the purchase of 1,120 bitcoins.
According to the Presidency, the rise in the value of the cryptocurrency generated a profit of 4 million dollars from the amount invested by the Government in the purchase of about 1,120 bitcoins since the beginning of September.
An analysis of the academic magazine Disruptiva indicates that El Salvador would have invested 59.72 million dollars in the purchase of bitcoin and these would have revalued, at least until October 28, by 9.23 million.
For the economist Cabrera, “if this were so” – the profits obtained – “means that the bitcoins are owned by the Government and not owned by the people who are using the wallet.”
“This goes against the spirit of this world of crypto assets where the decentralized nature implies that the person who has your wallet has the key to your bitcoins,” he said.
He added that it also “generates more doubts and above all it seems that the inside of the wallet handles chips and not really bitcoins.”
Bukele’s image wears out
According to a ranking by the Mitofsky polling house shared on Twitter, President Bukele tops the list of the best-evaluated leaders in America with 71% approval as of October.
However, this data reflects a drop in popularity of 13 percentage points compared to the March figure, when Bukele’s approval was 84%, without the company having detailed the reasons for this drop.
For Eduardo Escobar, the constant promotion of the bitcoin issue on President Bukele’s networks can “be part of a strategy to divert public attention from other problems that hit the public and to that extent keep them distracted.”
In Escobar’s opinion, it would be trying to “divert attention from the disappeared, the fiscal deficit and all that kind of thing that affects their image (Bukele’s).” (I)
Paul is a talented author and journalist with a passion for entertainment and general news. He currently works as a writer at the 247 News Agency, where he has established herself as a respected voice in the industry.
