First change:
El Salvador celebrates two years since implementing Bitcoin as legal tender. However, the results are still a matter of debate. In two years, the country has faced several challenges, including declining adoption of the digital currency among the population and uncertainty created by the government’s investment in cryptocurrency. Surveys reveal significant discontent and people are questioning whether Nayeb Bukhel’s bid was a success or a failure.
El Salvador celebrates this Thursday, September 7, two years since it adopted Bitcoin as legal tender, a means of secrecy and irregular financing of election campaigns or illegal activities.
In September 2021, El Salvador became the first country in the world to adopt a crypto asset as legal tender, on par with the US dollar, and since then, the government led by popular President Nayeb Bukele has invested more than $250 million. This project.
Bukhel allocated 150 million dollars to the foundation that will allow the conversion of bitcoin into dollars, and 107 million to the purchase of 2,381 digital assets, the purchase of which was announced by the president on the X social network.
Buckel offered $30 to people who downloaded a government digital wallet to encourage the use of bitcoin, which allows them to receive remittances, among other things.
A questionable investment
Although it costs about $107 million to buy a bitcoin, the Central American country is now worth about $61.3 million due to currency fluctuations. According to independent analysts, the country has lost 37% of its value in Bitcoin.
Bukhel also promised to issue $1,000 million worth of Bitcoin bonds, known as Volcano Bonds, in an attempt to finance the construction of Bitcoin City, although so far it has not materialized.
According to Eduardo Escobar, director of Ación Ciudadana, the country will go to elections in 2024 “with doors and windows open for organized crime, public funds and foreign governments to finance electoral campaigns”.
“We have been pointing out a deficiency in the oversight of both the Supreme Electoral Tribunal and the Court of Accounts of the Republic” and “this creates possibilities for illicit financing,” the expert said.
According to data from the Central Reserve Bank, the economy of the Central American country grew by 10.3% in 2021, but experts say that due to the economic recovery after the pandemic, this is not necessarily the implementation of Bitcoin.
According to a report published in the Georgetown Journal of International Affairs in March, organized crime groups in Brazil and Central America are using crypto assets for their illegal activities. The report reveals that the MS-13 gang, which operates in El Salvador, Honduras and Guatemala, uses Bitcoin as a way to extort money from victims.
With EFE and Reuters
