The Latin American nation still struggles to cope with the volatility of the premier cryptocurrency when it is used as a medium of exchange, thus spreading into everyday life and gaining the understanding and acceptance of Salvadorans.
The eccentric president
Before June 2021, the news about Nayib Bukele was probably far from reaching many cryptocurrency users. Instead, the Salvadoran president was making headlines following allegations of corruption and dictatorial behavior after his party-owned congress majority sacked five members of the country’s Supreme Court as well as its attorney general.
However, during the Bitcoin 2021 conference in Miami, Bukele stunned many attendees, having gained international attention by announcing that he was planning the adoption of bitcoin as legal tender in El Salvador. Within a week, a large majority of the Salvadoran legislature – in other words, most of Bukele’s own party – approved the passage of the bitcoin law, forcing all companies to accept cryptoassets as a form of payment. alongside the US dollar.
Bukele’s personal involvement in the cryptocurrency rollout seemed to extend beyond what many might have expected from a global leader. The Salvadoran president was already active on social media and presented himself differently from many politicians, often dressed casually in a baseball cap and jeans.
Since the bitcoin law came into effect in September, he has used his Twitter account to announce multiple bitcoin purchases totaling 1,391 BTC (over $ 71 million), likely using funds from the Salvadoran National Treasury. He also suggested the idea that the country can harness geothermal energy from its volcanoes to mine for crypto.
Locally, opposition to the Bitcoin law has manifested itself in the form of public statements by lawmakers unrelated to Bukele’s political party as well as protests in San Salvador, the nation’s capital.
Ahead of the law’s entry into force on September 7, a group of retirees, veterans, people with limited opportunities and workers marched through the capital to voice concerns over the volatility of the cryptoasset and the how the Bitcoin law could affect their pensions. Protesters calling themselves the ” Popular Resistance Bloc “Carried banners indicating” No to bitcoin To demand the repeal of the law.
The international reaction
Officials who were not exposed to Bukele’s influence have also expressed skepticism about the deployment of the first cryptocurrency.
In June, Victoria Nuland of the US State Department urged El Salvador to “look closely“Bitcoin to ensure that the digital asset was”well regulated” and enough “transparent“. For its part, the US government has also offered protection “against malicious actors“. The International Monetary Fund issued its own warning in July, saying the consequences for a country adopting bitcoin as legal tender “could be disastrous“.
President Bukele encouraged efforts to establish the regulatory framework for the adoption of BTC payments and to build the necessary infrastructure for Salvadoran traders and citizens to use crypto on a daily basis. The country is already home to Bitcoin Beach, an area of El Zonte village wherebitcoinerscan use cryptocurrency to pay for what they need, from utility bills to tacos. Authorities have also overseen the installation of hundreds of Chivo ATMs, allowing Salvadorans to withdraw money around the clock without paying commissions on their crypto holdings.
However, the announcement that stands out as possibly the most ambitious of Bukele’s 2021 crypto plans involved the creation of Bitcoin City, funded by $ 1 billion in BTC bonds. Cryptocurrency exchanges Bitfinex and Blockstream have previously said they plan to support the initiative, which will not aim to generate capital gains, income, property or payroll taxes.
Criticisms that Bukele reigns in an authoritarian manner have necessarily been toned down alongside the rollout of the bitcoin law. However, the president received support following his statements “downward purchase“, of its proposals to create a Bitcoin information network and other cryptocurrency-related developments in the country. We also see that the president seems to identify himself as the “coolest dictator in the world“: Bukele put the status of”CEO of El SalvadorIn his bio on Twitter.
Dictatorship does not quietly disappear
Before the official publication of the bitcoin law, police arrested a resident of San Salvador who had opposed the adoption of bitcoin as legal tender. In October, following several protests against Bukele’s policies, the government banned gatherings, saying its actions were aimed at preventing the spread of COVID-19. Nevertheless, sporting and cultural events have always been allowed.
At the end of the past year, it was still unclear whether the average citizen of El Salvador was reaping many of the government-promised rewards after the Bitcoin law was rolled out. Bukele announced in October that animals would benefit from the crypto, after announcing the construction of a veterinary hospital funded by the profits generated by theminingbitcoin. Notwithstanding, it is likely that the Latin American nation will still struggle to cope with the volatility of the digital asset, the presence of which in everyday life is not yet so familiar.
Led by the tireless President and ardent cryptocurrency supporter Nayib Bukele, El Salvador continues its journey towards full and outright adoption of bitcoin. Time will tell what fate awaits the small Central American country.
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