The real truth behind El Salvador’s adoption of Bitcoin as legal tender

 275 Interactions,  2 Today

El Salvador’s President, Nayib Bukele, has embraced Bitcoin—and Bitcoiners have conveniently remained mute about his track record.

El Salvador’s President, Nayib Bukele, announced the adoption of Bitcoin as legal money during this year’s Bitcoin 2021 conference in Miami.

The Salvadoran Congress adopted his plan to make Bitcoin legal money on Wednesday. According to the new legislation, it is the State’s role to enable its people’ financial inclusion, and that in order to promote the nation’s economic progress, it is “necessary to authorise the circulation of a digital currency whose value answers exclusively to free market criteria.”

In Bukele’s opinion, that digital money is Bitcoin, and any “economic agent” (merchant) in El Salvador is now compelled by law to accept Bitcoin as payment when provided by a buyer. Furthermore, El Salvadorans can now pay their taxes with Bitcoin.

It is too early to predict where El Salvador’s Bitcoin project will take the country. There are obvious risks—not least of all Bitcoin’s well-documented price volatility—but we can learn a lot from the overwhelming praise the move has received from big Bitcoin influencers like Peter McCormack, Caitlin Long and Michael Saylor.

 

Jack Mallers, who introduced Bukele’s announcement at the Bitcoin conference in Miami, tweeted, “Today, the world changes for the better. Today, humanity takes a leap forward in instilling human freedom, financial inclusivity, and so much more.”

The only issue? El Salvador isn’t exactly a glowing example of human liberty and financial inclusion—far from it. And Bukele might not be the hero that Bitcoin is looking for.

Any Bitcoiner would gladly tell you that Bitcoin is the solution to many of the world’s financial issues, such as inflation, excessive government spending, and corruption. Fix the money, then you’ll be able to fix the planet.

Why have Bitcoiners lost their principles now that a government like Bukele’s accepts Bitcoin? El Salvador’s descent towards dictatorship is well chronicled, but it’s worth examining the country’s history now that the Central American country is front and centre on the Bitcoin stage.

See also  Following the SNL debacle, here is a 'Dogecoin technique' that might succeed.

 

El Salvador’s politics

El Salvador is not a democratic country.

Per The Economist’s Democracy Index 2020 report, El Salvador is defined as a “hybrid regime,” placing it one category above outright authoritarian states, but below flawed democracies, let alone full democracies.

El Salvador’s political culture scores a 3.75 out of 10, and its “functioning of government” notched a similarly low score of 4.29. Civil liberties came in at 6.18. In fact, no other Latin American country fell further towards authoritarianism in 2020 than El Salvador. (Bukele, 37 at the time and pledging to end corruption, was elected in February 2019.)

Behind some of the numbers are a highlight reel of Bukele’s political decisions, all of which are antithetical to every Bitcoiner that promises, as Mallers touted, “human freedom, financial inclusivity, and so much more.”

In February of last year, armed soldiers and law enforcement personnel accompanied Bukele into the nation’s parliament building. The president demanded that opposition lawmakers approve his plan for a $109 million loan that he claimed would fund the military and police against criminal gangs.

In May of this year, the United States named five of Bukele’s aides as “credibly alleged” to be corrupt, including his Chief of Cabinet Carolina Recinos, and Rogelio Rivas, Minister for Security and Justice.

Bukele’s anti-democratic tendencies were also evident in his management of the COVID-19 outbreak. As the epidemic continued on, Bukele defied Supreme Court judgments requiring him to protect human rights while enforcing quarantine laws.

Security forces have also reportedly detained people arbitrarily in containment centers, and according to Human Rights Watch, hundreds of detainees have been held in “overcrowded, unhygienic conditions that threaten their health.”

El Salvadoran law enforcement have been caught brutally beating an 80 year old man for allegedly not complying with COVID requirements. Perhaps this is not shocking, given that Bukele explicitly told law enforcement and the military to “be tougher with people violating the quarantine.” He even added that he would not mind if police “bent someone’s wrist” during an arrest.

See also  What you need to hear about traders' "dream portfolios" containing XRP, Binance coin, Dogecoin, and Matic.

What should Bitcoiners do now?

Bitcoin has long found favor with Libertarians and advocates of limited government. Many of Bitcoin’s core features—peer to peer transactions, increased privacy, and lack of government control—have helped it catch on with cypherpunks around the world.

But while Bitcoin promises a certain political ideal for those that believe in it, there has been little opposition to an undemocratic head of state embracing the cryptocurrency.

And yet, on Crypto Twitter, Bitcoiners have predictably dismissed anyone pointing out the political concerns.

“There has been some media criticism that Bitcoiners should not support a ‘pseudo-authoritarian’ government adopting Bitcoin as a national currency,” Jason Deane, Bitcoin analyst at Quantum Economics, told Decrypt through Telegram, “but this displays a lack of knowledge of what it represents.”

Bitcoin, according to Deane, is apolitical. “This is why, without apology or reservation, Bitcoiners in particular—and humanitarians in general—celebrate this as an extremely positive step in the journey towards monetary freedom of the individual and (in this case) state.”

 

 

Others have drawn a distinction between Bukele’s record and his stance on Bitcoin—appearing to rationalize the inherent tension between his regime and Bitcoin’s alleged promise.

“I can’t speak for anyone else but as a self-identified Bitcoiner, I have made it a point to criticize Bukele’s human rights record. Especially with regard to sacking judges and pressuring the parliament,” Alex Gladstein, chief strategy officer at the Human Rights Foundation, told Decrypt.

“I have repeatedly asked people not to celebrate the leader, but the action,” he says. “An action which is a massive win for human rights as it will empower Salvadorans, connect them to the world, and give them access to a money that cannot be debased, censored, or remotely confiscated.”

See also  Elon Musk Just Pumped CumRocket?

Bitcoin, the technology, is indeed apolitical. But Bitcoiners have made it very clear that they are not—scores of them first came to crypto due to their passionate political beliefs. And while they might not say it publicly, their new favorite country to tweet about, and its political leader, are a far cry from their political ideals.

Subscribe to our newsletter

Loading

Leave a Reply

Your email address will not be published. Required fields are marked *