{"id":2364,"date":"2022-07-26T11:00:00","date_gmt":"2022-07-26T15:00:00","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=2364"},"modified":"2024-04-25T23:18:42","modified_gmt":"2024-04-26T03:18:42","slug":"an-update-on-el-salvadors-bitcoin-experiment","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/an-update-on-el-salvadors-bitcoin-experiment\/","title":{"rendered":"An Update on El Salvador\u2019s Bitcoin Experiment"},"content":{"rendered":"\n<figure class=\"wp-block-image aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update-1024x344.jpg\" alt=\"\" class=\"wp-image-2365\" width=\"1024\" height=\"344\" srcset=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update-1024x344.jpg 1024w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update-300x101.jpg 300w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update-768x258.jpg 768w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update-1536x516.jpg 1536w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2022\/07\/el-salvador-blockchain-update.jpg 2038w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Blockchain Blues?<\/figcaption><\/figure>\n\n\n\n<p>In El Salvador, people can use bitcoin to buy houses \u2014 or most anything that\u2019s sold in the streets, shops, and malls. President Nayib Bukele\u2019s quest to make bitcoin the nation\u2019s legal tender means it\u2019s gradually being phased into the economy through a suite of incentives.<\/p>\n\n\n\n<p>The plan is bold. For a nation tethered to the U.S. dollar and U.S. economic planning, the bitcoin quest is freeing. But the value of bitcoin dropped from around 69K in November 2021 to around 19K a few months later. No surprise, then, that Nayib Bukele \u2014 quite popular on other scores \u2014 has received plenty of criticism over bitcoin.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">The Pros and Cons So Far<\/h2>\n\n\n\n<p>First, the pros. The bitcoin plan gives El Salvador a high-tech, forward-thinking vibe. The concept is environmentally interesting, too, with its goal of powering miners with a volcano\u2019s natural energy.<\/p>\n\n\n\n<p>And it\u2019s been a way for the country to share wealth with the people. Notably, most of El Salvador\u2019s people do not have bank accounts. Bukele\u2019s government committed $200 million to equip everyone with the Chivo wallet app. Anyone loading the app on a smartphone gets $30 worth of bitcoin for free. Most people do have smartphones, and most signed up.<\/p>\n\n\n\n<p>For some Salvadoreans, bitcoin adoption means financial opportunities beyond bank accounts. For others, it\u2019s a gateway to a growing tech sector and a financial future at home, rather than abroad.<\/p>\n\n\n\n<p>Then there\u2019s the other side of the coin. Since late 2021, the country has bought up 2,301 bitcoins, at the cost of nearly $104 million. And by the summer of 2022, according to <em>CoinDesk<\/em>, El Salvador\u2019s bitcoin had lost 55% of its worth.<\/p>\n\n\n\n<p>Critics also point to the less-than-impressive influx of tech businesses to El Salvador. They say the move has made El Salvador\u2019s economy even more vulnerable than it used to be. Indeed, the country is cash-strapped and having trouble funding its infrastructure. The government will soon have an $800 million debt payment to make. Losing more than $60 million in bitcoin doesn\u2019t help.<\/p>\n\n\n\n<p>It\u2019s a high-profile setback for Bukele, who has planned to produce the first-ever government bitcoin bond. The bond would represent El Salvador\u2019s financial independence from the International Monetary Fund.<\/p>\n\n\n\n<p>Bukele remains committed. El Salvador purchased 80 more bitcoin for around $19K per coin at the end of June 2022.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Will Other Nations Follow Suit?<\/h2>\n\n\n\n<p>So far, it\u2019s happened in the <a href=\"https:\/\/www.bbc.com\/news\/world-africa-61565485\" target=\"_blank\" rel=\"noreferrer noopener\">Central African Republic<\/a> (CAR). Opening bank accounts is expensive there, and most people are excluded from the financial system. So, President Faustin-Archange Touad\u00e9ra has decided to make the bitcoin-based Sango legal for use throughout the country.<\/p>\n\n\n\n<p>The Central African Republic is one of the most economically challenged nations in the world \u2014 which is surely one reason its leader wants to take this chance. And like El Salvador, CAR is focusing on improving technology, connectivity, and internet access for an entire population, inspired by the goal of making bitcoin work. In 2023, after CAR gets its own people online, it will offer internet technology to Cameroon, the BBC has reported.<\/p>\n\n\n\n<p>Before adopting bitcoin this year, CAR ran on a financial system linked to France and the euro. So the African nation is looking to bitcoin as a path to financial independence \u2014 also like El Salvador.<\/p>\n\n\n\n<p>Bitcoin and all blockchain-based assets are still thought to be in their early stages. So it\u2019s too early to call these experiments mistaken. As we go to press, bitcoin\u2019s price is nearly $23,000 \u2014 up significantly from its lows. Assuming the upward trajectory holds, could it lift many people from poverty to financial freedom? If so, these two countries will be deemed trendsetters.<\/p>\n\n\n\n<p><strong>Supporting References<\/strong><\/p>\n\n\n\n<p class=\"has-small-font-size\">Anatoly Kurmanaev for the <em>New York Times<\/em>: <a href=\"https:\/\/www.nytimes.com\/2022\/07\/05\/world\/americas\/el-salvador-bitcoin-national-currency.html\" target=\"_blank\" rel=\"noreferrer noopener\">A Poor Country Made Bitcoin a National Currency. The Bet Isn\u2019t Paying Off<\/a> (Jul. 5, 2022).<\/p>\n\n\n\n<p class=\"has-small-font-size\">Andr\u00e9s Engler for <em>CoinDesk<\/em> (Digital Currency Group): <a href=\"https:\/\/www.coindesk.com\/business\/2022\/07\/01\/el-salvador-purchases-80-additional-bitcoin-at-19k-president-bukele-says\/\" target=\"_blank\" rel=\"noreferrer noopener\">Business \u2013 El Salvador Purchases 80 Additional Bitcoin at $19K, President Bukele Says<\/a> (updated Jul. 1, 2022).<\/p>\n\n\n\n<p class=\"has-small-font-size\">Joe Tidy for <em>BBC News<\/em>: <a href=\"https:\/\/www.bbc.com\/news\/technology-61813845\" target=\"_blank\" rel=\"noreferrer noopener\">Bitcoin: Will El Salvador&#8217;s Big Crypto Gamble Pay Off<\/a>? (Jun. 16, 2022).<\/p>\n\n\n\n<p class=\"has-small-font-size\">Rachel Savage for <em>Reuters.com<\/em>: Central African Republic President: Crypto Is Key to Financial Inclusion (Jul. 3, 2022).<\/p>\n\n\n\n<p class=\"has-small-font-size\">And as linked.<\/p>\n\n\n\n<p class=\"has-small-font-size\">Photo credit: <a href=\"https:\/\/www.pexels.com\/photo\/people-travel-pin-research-8874750\/\" target=\"_blank\" rel=\"noreferrer noopener\">Ryan<\/a>, via Pexels.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In El Salvador, people can use bitcoin to buy houses \u2014 or most anything that\u2019s sold in the streets, shops, and malls. President Nayib Bukele\u2019s quest to make bitcoin the nation\u2019s legal tender means it\u2019s gradually being phased into the economy through a suite of incentives. The plan is bold. For a nation tethered to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[85],"tags":[],"class_list":["post-2364","post","type-post","status-publish","format-standard","hentry","category-blockchain"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>An Update on El Salvador\u2019s Bitcoin Experiment - Deeds.com<\/title>\n<meta name=\"description\" content=\"The plan is bold. For a nation tethered to the U.S. dollar and U.S. economic planning, the bitcoin quest is freeing. 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