He bitcointhe president’s bet Nayib Bukele to revitalize the Salvadoran economy, celebrates two years this Thursday as legal tender in The Saviorwith a very restricted use, without generating confidence in the population.
On September 7, 2021, bitcoin began to legally circulate in the country at the request of the president. Bukele tried to ensure that remittances from abroad flow at a lower cost, and that Salvadorans, 70% of whom were outside the financial system, were enrolled in massive numbers.
But two years later the objectives that were pursued […] They have not been achieved, people hardly use it, they do not trust much “ in bitcoin, says independent economist Carlos Acevedo.
“The experiment has not worked, live a crypto winter”adds the former president of the Salvadoran Central Reserve Bank.
“It’s a theft”
Despite Bukele’s high popularity with his “war” against gangs (90% approval), the president has so far failed to convince his compatriots of the benefits he attributes to bitcoin.
71% of Salvadorans consider that cryptocurrency “It has not helped at all to improve their family economic situation”according to a survey by the Central American University (UCA) released in May.
In the streets of San Salvador, the rejection of this currency is palpable.
“I don’t see how that money works, it’s just propaganda. Where is the benefit? There is no benefit. It’s a bad investment”, considers the newspaper seller Juan Antonio Salgado, 65 years old. “It’s a theft”, points out when referring to the volatile price of the cryptocurrency.
“There is no trust”
Bukele was confident that family remittances from abroad, which represent 21% of Salvadoran GDP, would arrive en masse in cryptocurrencies, but that did not happen.
To channel bitcoin transactions and remittances, the government created the system Goat Walletbut only 1% of the US$ 4.710 million sent from abroad between family members arrived in the country through that digital wallet between January and July of this year, according to the Central Reserve Bank.
“People don’t really have confidence in a cryptocurrency whose value changes from one moment to the next, and in the country people prefer to use cold hard cash”points out the independent economist Julia Martínez, a former academic at the UCA.
When Bukele introduced bitcoin, the measure did not fall in favor among multilateral organizations and was questioned by the World Bank and the International Monetary Fund, which warned of the high volatility of the asset.
“Bitcoin City”?
For now “it cannot be said (of) that the government failed” with the bitcoin, well “its price can rise from one moment to another and it would be another scenario”, reflects Acevedo.
In September 2021, when it began to be used in El Salvador in parallel to the dollar, the cryptocurrency was around US$45,000 and a couple of months later it rose to US$68,000.
After that rise, Bukele, very frequent on social networks, announced with pomp in an act on a beach his plan to build the “Bitcoin City”a city near the Gulf of Fonseca that would work with the thermal energy of a volcano.
El Salvador would issue about $1 billion in bitcoin bonds to finance the initiative. It is still unknown when these bonds will be released on the international market, and the urban project has not advanced.
Bitcoin is currently trading at just over US$25,500.
The Salvadoran government has publicly said that it has bought 2,381 bitcoin, without revealing the figures of what was invested. The last purchase was made on June 30, 2022 when he acquired 80 bitcoin.
On November 17, 2022, Bukele announced that El Salvador would buy one bitcoin daily, although the government has not disclosed whether or not that happened.
The independent economist César Villalona explains that bitcoin “does not exist in the local economy”Well, in El Salvador “all” paid in dollars: wages, services and purchases in commerce.
Others see possibilities in this cryptocurrency.
José Francisco Ayala, a 38-year-old youtuber, affirms that the use of bitcoin is a matter of “learning” and knowing how to use technology. “We are going forward, we are not going backwards. As we learn, we are going to get into that environment”assures.
Source: AFP
Source: Gestion
Ricardo is a renowned author and journalist, known for his exceptional writing on top-news stories. He currently works as a writer at the 247 News Agency, where he is known for his ability to deliver breaking news and insightful analysis on the most pressing issues of the day.
