Nayib Bukele, President of El Salvador. Photography by Alex Pina/Anadolu – Getty Images
Proving the case is the Wednesday edition of Fortune Crypto where Leo Schwartz provides insider insights on policy and regulation.
On Sunday, Salvadoran President Nayib Bukele won re-election in a landslide, claiming to have received more than 85% of the vote. From the outside, his victory looked like a triumph for a nation once synonymous with poverty and gang violence. Under Bukele's rule, El Salvador became one of the safest countries in Latin America, leading to widespread support for him With a steady hand Approaching.
Bukele's fans expand far beyond the small Central American nation, with Bitcoiners representing one of his most loyal legions of support. After all, Bukele announced that Bitcoin will be a legal tender in 2021, and continues to work with companies like Bitfinex and Strike to attract interest from cryptocurrency investors.
The reality of Bukele's rule is far more sinister. As president, his tactics were oppressive and anti-democratic: expelling five Supreme Court justices and replacing them with loyalists, pushing the Assembly to allow consecutive presidential terms and paving the constitutional path to his re-election, sending armed forces to occupy the Parliament building amid a dispute over the crime bill, and arresting thousands of innocents in his campaign Cruel oppressive.
Bukele's reign bears all the hallmarks of an autocrat – he even welcomes associations, and attacks his critics by describing his social media accounts as “the most wonderful dictator in the world.” He has backed his self-chosen title with a set of laws that press freedom groups describe as clear attempts at censorship. Unsurprisingly, he was re-elected It was dark Due to irregularities in vote counting.
However, Bukele still has widespread support in the cryptocurrency crowd. When Rep. Ilhan Omar (D-Minn.) sent a letter to Secretary of State Antony Blinken last week urging action on Bukele's threats to Salvadoran democracy, she knew it. he met With harsh criticism from blue-tagged crypto acolytes on X, with one prominent Bitcoin user telling her: “You need to come back.”
Bukele's supporters outside El Salvador argue that tough measures were necessary to resolve the country's spreading occupation by gangs like MS-13 — an argument that avoids the uncomfortable truth that the violence stems from a disastrous US policy and that Bukele appears to be working directly with organized groups. A crime to maintain peace, which does not address the root causes of the conflict. However, it cannot be denied that Bukele achieved at least temporary peace, which led to widespread domestic support in a country that never recovered from its civil war that ended in 1992.
What is even more worrying is that Bitcoin users are abandoning their core ideals. Satoshi envisioned an alternative financial system that would not be subject to authoritarian governments and institutions, one that would be in the hands of its users. Even Bukele's introduction of Bitcoin was in stark contrast to those founding principles.
I visited El Salvador in November 2021 to report on Bukele's Bitcoin gambit, which has been around for several months. Bukele's management has commissioned a custodial wallet called Chivo that Salvadorans can use to hold and transact Bitcoin, and the wallet even holds $30 worth of Bitcoin to stimulate adoption.
The launch was, of course, a disaster, as the cash-reliant population was unwilling to switch to the volatile cryptocurrency for daily transactions, and bugs and security issues marred the launch. While that was expected, Bukele's approach was even worse — it was unclear who actually controlled the country's cryptocurrency holdings, and any “not your keys, not your coins” illusion was quickly abandoned. When I spoke with Bitcoin users from the US who had traveled to visit the so-called land of cryptocurrencies, many were dismayed to discover that Bukele's mysterious launch was actually just a PR stunt.
Not much has changed. Bukele has succeeded in attracting notable figures such as Max Keyser, Jack Mallers, and Paolo Ardoino to the country, but adoption is still close to zero, and promised initiatives such as “Bitcoin City” and “Volcano Bonds” have gone nowhere.
Don't trust, as Bitcoiners like to say. Confirms.
Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz
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Mimi, oh wait
