Opinion: Bitcoin is Robin Hood in reverse for the Salvadoran poor
One year ago El Salvador made Bitcoin legal tender to spur foreign investment and economic growth. The results have not lived up to the promises of President Bukele.
OPINIÓN
RICARDO VALENCIA
Assistant Professor California State Fullerton
2022-09-07T10:58:45-04:00
People protest against President Nayib Bukele's policies on Independence Day
in San Salvador, on September 15, 2021.
Crédito: MARVIN RECINOS/AFP via Getty Images
In September 2021, El Salvador made Bitcoin legal tender to spur foreign investment and economic growth. Since then, the Central American country is poorer and walks the tight rope of financial default. Contrary to the expectation that the cryptocurrency would bring financial inclusion, Bitcoin adoption has depleted El Salvador’s Treasury, ballooned its foreign debt, and failed to tackle mass migration to the U.S.
The experiment started seemingly as a great strategy to attract Bitcoin enthusiasts to build-what many fans of the Salvadoran president Nayib Bukele called the “Salvadoran dream”. The head of state of this small country, the size of Massachusetts, tried to lure crypto entrepreneurs by promising no capital gain tax, immediate permanent residency, and beachfront properties. The scheme included using public money to purchase $1.52 million in Bitcoin and launching an electronic wallet called Chivo (cool in Spanish) with a network of 200 ATMs.
The dream was short-lived. By the first semester of 2022, the usage of Chivo Wallet was so low that it reported virtually no downloads, and the country’s Bitcoins lost 50% of its value.
El Salvador has wasted at least $425 million adopting the cryptocurrency, equivalent to nearly a third of the 2022 Salvadoran budget for education and more than 40% earmarked for healthcare. El Salvador has the lowest foreign direct investment in Central America, and the World Bank envisions an economic recession by 2023.
More:
https://www.univision.com/univision-news/opinion/one-year-on-bitcoin-has-done-little-for-poor-in-el-salvador
= new reply since forum marked as read
