On September 7, 2021, Savior Adopted as the first country in the world Bitcoin As a national currency – the dollar – an initiative promoted by the president Naib BukeleWho wants to turn the small Central American nation into the global capital of cryptocurrencies.
Seven months later, Panorama is not very inspiring for BukelBecause from November 2021 The Bitcoin It has lost 56% of its market value. At the end of last year, when it reached its historic peak, The Cryptocurrency It costs $ 60,000 and currently costs about $ 30,000.
The so-called Le BitcoinIn addition, it forces merchants to accept payments in this cryptocurrency and allows citizens to pay taxes using the same currency.
To this end, the government appointed Chivo Wallet, a Digital wallet It offered a US $ 30 bonus to those who downloaded it and established a network of 200 ATMs across the country.
However, citizenship does not seem to be accompanied by illusions See. A survey conducted by the US National Economic Research Bureau and CID Gallup in February revealed that. Only 20% of those who download Chivo Wallet still use it.
“The average salary in this country is enough to cover daily expenses. The Bitcoin In a poor country like El Salvador, it’s a currency that targets people in recession who can say they will not use $ 10,000 a year and lose it without affecting them. It is very difficult to find people who are in that game”, Explains Trade Fernando Romero, a journalist with the Salvador newspaper Factamine, said he had adopted cryptocurrency in his country.
Another study of El Salvador’s trade and industry (Camera)Shows that Bitcoin es “Indifference“For most merchants. According to Camarasal’s data, the number of businesses receiving Bitcoin payments fell from 22% in November 2021 to 14% in February this year.
For 92% of merchants, in addition, the study further states that cryptocurrency did not cause any change in their businesses.
“The use of bitcoin is very low in El Salvador. I would boldly say that this is about 1% of the population, taking into account the measurements made by experts and organizations on average. The most important percentage of the Salvador economy lasted through remittances, which means that between January and February 2022 just 1.7% of money was made in bitcoin.Romero Comments.
“The problem with bitcoin is its volatility and lack of support with any currency. It’s like smoking. That’s why bitcoin is so easy to buy, but so hard to sell.”
Costs and higher costs
Economist Ricardo Castaneda, from the Central American Institute of Financial Research, Rated to Middle France 24 The Salvador government has spent $ 225.3 million on implementation Bitcoin.
“This expense was announced by the government because it must have a trust that acts as a transfer body at the entrance to the currency. El Salvador’s Development Bank received that $ 200 million to support Bitcoin. If you buy $ 100 bitcoin in the Chivo wallet on September 8th, the next day it turns out to be $ 500 your luck. If you go to the cashier to collect it in dollars. That extra $ 400 came from the trust he received from the government. But the money from the Salvador tax was all overRomero explains.
According to the journalist, this attitude of the users has broken the moral circle that the government had planned to feed the reserves. The main reason for this is a misreading of the Salvador reality.
“This is because of the urgency with which Bitcoin came. The law was passed from the presidency to the legislature without any prior discussion, without prior consultation and without the opinion of the central bank. The legislature is governed by the president, and the majority of the delegates respond to his guidance, here we know them as ‘button bushers’. The law was sent in July and it was announced that it would come into force in September, and the country should know about this virtual currency within those three months. It’s something completely different, there are no bills, there is nothing physically, it’s not always the same. El Salvador has serious shortcomings in its education and schooling, so you need more time to teach her in such a matter.”, Commented the journalist.
Rejection by ignorance
Romero explains the concept of bitcoin among the people of Salvador. The reaction of the population is the rejection of bitcoin, but it deserves to be. Bitcoin has no downside, but it is the opposite of what a citizen uses. It is not about the citizens who have opened an account in the wallet, made transactions, understood what blockchain is and lost when investing. People are not even involved and they do not want to complicate life. It is rejection due to ignorance and complexity.
The volcano of bitcoins
See Planned to create the so-called City of BitcoinFor those who bet this is a kind of paradise or world capital Cryptocurrency It is tax free and welcomes foreign and local investors to live in it.
The government also promised that it would be a city that could cut coins without polluting the environment as it gets all the energy it needs from the Kanchagua volcano.
However, to do this would require a billion dollar investment See He intended to get through the national bonds he was introducing to the market and they wisely named it “Volcano bonus”.
That was expected Bonds Released March 2022, but it never happened. The government’s argument, in the voice of Finance Minister Alejandro Zelaya, has created instability in the war markets in Ukraine, for which it is better to wait a few months.
The fact still points to a loss of confidence in the Salvador economy internationally.
“To date there are no feasibility studies on the energy that the volcano can provide. They are only government speculations. As for securities, the government’s authoritarian policies have caused the country to lose financial credibility abroad. This is a domino effect. Although the world of Bitcoin aims to be anti-systems, in the end it is money. If you have an economy that is classified as volatile, it may be financially unreliable and default, you may be a bitcoin, but you are not going to buy unpaid bonds later. The government promises to delay the sale of bonds until September, but so far there are no interested investorsRomero Comments.
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