In El Salvador, Bitcoin’s Liberalism Meets an Autocracy

At the beginning of June, a pre-recorded video informed the people of El Salvador that they were about to participate in a major experiment. The speaker was Nayib Bukele, the country’s 40-year-old president, who stated that he has plans for a better future: Bitcoin. The electronic money He said it would become legal tender in the country – a first global tender that would elevate it to the same legal status as the US dollar, El Salvador’s national currency since 2001. This will help the unemployed and those left behind by the bank. But for a plan to help struggling Salvadorans, they were conspicuously absent; Bukele doesn’t even speak Spanish. Instead, the message was broadcast to a cheering crowd of international Bitcoin enthusiasts at a conference in Miami.

In the capital San Salvador, Mario Gomez, a charismatic 36-year-old software developer and founder of a “hacker space” for fellow programmers, is skeptical. “I wasn’t completely convinced of everything these guys were selling,” he explained later. As a lover of open source technology, he doesn’t consider himself an enemy of Bitcoin, but he did run into trouble with the government seemingly favoring bitcoin for its people. So he took to Twitter. In the weeks that followed, his criticism of the plan increased, and so did those who followed him.

On August 31, Gomez tweeted several leaked slides of an app called Chivo, the government’s upcoming Bitcoin wallet, along with the criticism. The next morning, he was driving his mother to work, and as usual, he was pulled over by the national police. There was a problem with his car, officers told him, although they wouldn’t tell him what the problem was. Gomez recalls feeling confused rather than terrified. He quickly typed a message to his about 8,000 Twitter followers before the officers confiscated his phone. His mother captured a photo of him being loaded onto the bed of a police van, which took him to a nearby station and then to another, where he said he was denied access to the law. monk. Meanwhile, an outcry grew on Twitter demanding his release. Six hours later, authorities let him go.

Salvadoran police said Gomez is being investigated for unspecified financial crimes, although no charges have been filed. Gomez and lawyers from Cristosal, a human rights group that represents him, argue that his detention is related to information he shared about Chivo and an act of intimidation to speak out. His phone was never returned, but he did go back to Twitter, where he insists he’s still just a guy giving opinions regarding his work. He found that rather ironic. Bitcoin has long been seen as a signal of freedom from banks and governments. Yet somehow, by protesting his country’s use of Bitcoin, Gomez has become a reluctant dissident. The National Police did not respond to a request for comment.

An emerging powerhouse

Bukele’s June Bitcoin announcement comes as he tightens his grip on power. The first signs of a strong man on the rise appeared a year earlier when, after failing in a legislative vote, he entered the country’s legislative parliament with police support. armed and soldiers. Sitting in the chair reserved for the president of the legislature, Bukele prayed to God, with whom he later said he had to be patient. You don’t have to wait long. In May, after securing a majority in the legislature, Bukele’s coalition voted to remove the attorney general and all five members of the country’s constitutional court and replace them with centrists. Fort. Soon after, Bukele designed the extension of his presidency beyond the usual limits.

El Salvador’s authoritarian diversion has prompted warnings from the United States, which has punished Bukele’s close allies for corruption and said it would divert aid from the government to civil society groups. But in El Salvador, Bukele remains the favorite, with polls showing his approval rate at more than 80%. For a while, he changed his Twitter profile to “World’s Greatest Dictator.” (It is now “The CEO of El Salvador”.) The American caudillos of the past,” says Eduardo Gamarra, a political scientist at Florida International University.

Bukele touted Bitcoin as an opportunity for Salvadorans, specifically as a way to reduce the high fees for those receiving US dollars from abroad, the flow of which represents nearly a quarter of El Salvador’s economy. He confidently predicted that the value of Bitcoin would soar, bringing wealth to the country. But despite Bukele’s popularity, ordinary Salvadorans were uncertain about who would benefit. A September poll found that more than two thirds Salvadorans do not accept the “Bitcoin Law” and protests against the use of tax dollars to buy a volatile cryptocurrency have attracted thousands. Activists like Gomez say the government has moved too quickly and that the people who are struggling that Bukele claims he wants to help are the ones most likely to suffer. In the poll, respondents’ biggest concern about Bitcoin is its volatility and they don’t know how to use it.

But the Bitcoin effort has only grown in size and hype in recent months – largely fueled by Bukele’s personal Twitter account. The government is pushing for measures to entice foreign investors, including $1 billion in Bitcoin-backed bonds, laxly regulated economic zones, tax breaks, and permanent residency for foreign investors. multi-dollar investors. Those policies were largely created by a small group of presidential advisers, many of whom are foreigners, according to the participants.