A country where everything from trinkets on street vendors to income taxes can be paid in bitcoin. This is not El Salvador.
On September 7, 2021, the country entered the forefront of delirium by turning bitcoin into legal tender, alongside the dollar. It took me just one day in the capital, San Salvador, to find traders who refuse crypto.
“Every economic agent must accept bitcoin as a form of payment”, says the law, which passed in the ruling Congress at the touch of a cashier. The proposal was announced by President Nayib Bukele at a currency conference in Florida on June 5th of last year. Four days later, it was approved. Three months later, in effect.
At the city’s handicraft fair, the president’s approval rating of more than 80%, according to a survey by the local newspaper La Prensa, appears on key chains, mugs and notebooks stamped with Bukele’s face. There, during my visit to Central America in July, I received some explanations for the lame adoption of cryptocurrency.
Low demand, a saleswoman told me. Difficulty using the country’s e-wallet, pointed out an elderly businesswoman.
Data from the International Telecommunications Union show that 4G coverage in the territory reaches 68% of the population, 17 points less than the global average. This obstacle was repeatedly trumpeted by experts at the time of the project’s approval.
A key component to the low enthusiasm for bitcoin, however, was blown to me by a taxi driver. Investors have had their wallets at a standstill since digital assets collapsed at the end of last year. There is no reason to spend the currency and realize the loss.
In November, when cryptocurrencies were at their peak due to the expansionary monetary policies of central banks, one bitcoin hit US$ 64,400 (R$ 349,000, in exchange rate at the time). In June this year, it dropped 70%, to US$ 19,000 (R$ 109,500).
Regardless of enthusiasts’ efforts, bitcoin is treated as an asset, not a currency. And one of the most risky ones — therefore, aimed at those who have fat to burn. That is not the case for the nearly 1.7 million Salvadorans (more than a quarter of the population) who lived below the poverty line in 2020, according to World Bank data.
The government, which decided to adopt bitcoin as its official currency, should count on sudden drops and volatility.
Since he began his adventure, Bukele has announced on Twitter — where he has already fired ministers — the purchase of bitcoins by the state. There is no transparency. According to La Prensa, there have been 2,381 bitcoins so far, an investment of US$ 104.5 million (R$ 527.6 million). I asked the Presidency how many bitcoins El Salvador has, but there was no answer.
Digital currency is yet another element of the theater that Bukele sets up to be the coolest authoritarian in the world. The politician joined the populist wave, taking advantage of the friction accumulated by the country’s two main parties since the 1992 peace agreement, which ended a 13-year civil war.
Bitcoin aside, I faced an odyssey to buy books on one of the fundamental themes of the country: the pandilhas, criminal groups that dominate part of the Salvadoran territory.
At the Universidad Centroamericana bookstore — one of the best in the country, they say — I asked for titles by Óscar Martínez, editor-in-chief of the newspaper El Faro and author of the report that revealed an agreement between the Bukele government and a gang. Did not have.
The government has imposed a penalty of up to 15 years in prison for anyone who disseminates messages from organized crime, which prevents the exercise of journalism. I had to turn to a colleague, who told me where to find the publication.
On the way to the bookstore, billboards asked for “help to keep capturing terrorists.” Just dial 123. Since a wave of violence that killed 87 people in 72 hours in March, the country has been in a state of emergency.
There are no official data on the number of prisoners in the period. At the end of May, La Prensa estimated a total of 74,547 prisoners, 1.7% of the adult population. By the end of June, the human rights organization Cristosal had counted 54 people killed in state custody in penal centers or hospitals.
Not even bitcoin, with its fantasies of freedom and progress, can compete with such a reality.
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
