The day El Salvador adopted bitcoin as legal tender, its president spent the morning providing technical support from his Twitter account after the digital wallet used for transactions was deactivated.
The country’s Chivo wallet, which offers $ 30 in free bitcoin for local users, launched at midnight, but was offline five hours later due to lack of server capacity. Seemingly unflappable, President Nayib Bukele asked for patience and announced that the government had bought an additional 150 bitcoins, bringing the total holding to 550 ($ 26 million). He then retweeted a US bitcoin journalist who had successfully paid for his McDonald’s breakfast using cryptocurrency.
At one point, Bukele tweeted: “Those of you who have downloaded @chivowallet and are not yet registered, can you please try to register and post the comments if there are any errors or if the process works fine?”
Meanwhile, the value of bitcoin plummeted early Tuesday, from more than $ 52,000 per coin to $ 42,000, before recovering about half of that loss, in an example of the volatility that continues to plague the currency.
Meanwhile, critics of Bukele warned that the international media noise generated by the adoption of bitcoin had served to distract attention from the consolidation of the president’s political power and the constant erosion of democratic institutions.
“There has been a high degree of improvisation in Chivo’s deployment and a lot of opacity,” says Ricardo Castañeda, a local economist. “The application requests access to your microphone and your contacts, which are not necessary for a wallet. Bitcoin can be a distraction, but given the decision to go ahead with the plan despite popular opposition and expert advice, it could also be a major pillar of Bukele’s political project. “
Recent polls have found that two-thirds of Salvadorans oppose the decision to adopt cryptocurrency.
On Friday, the Central American country’s highest court ruled that the 40-year-old president can run for a second term in 2024, overturning a ruling that barred re-election for 10 years.
“For those closely following Salvadoran politics, this was completely predictable,” said Carlos López Bernal, a history professor at the University of El Salvador. “Bukele has dealt systematic blows to the constitution and today controls all three branches of government.”
In February 2020, Bukele ordered troops to enter parliament to support his military spending plan. As part of his self-described anti-corruption crusade, he removed five judges and the attorney general in May and last week Congress approved a reform to fire all judges over 60. Meanwhile, the government held secret negotiations with the country’s most powerful gangs, and many of the most important decisions are made by unelected advisers, mainly by his brothers and members of the Venezuelan opposition.
“Who is Bukele boss for? For him and a close group of family members and allies, ”said López Bernal.
Bukele, a former marketing executive, is Latin America’s most popular president, with an approval rating regularly above 85% since he took office. But that level has dropped below 75% in recent weeks, mostly due to objections to the bitcoin law.
“The risks of the law are not going to be known immediately. It will take weeks to develop, ”says Castañeda. “The hundreds of millions of dollars spent buying bitcoins come from the general budget and could have been spent on health or education. Even Salvadorans who don’t use bitcoin will pay the price for this experiment. “
George is Digismak’s reported cum editor with 13 years of experience in Journalism