- Bukele introduced Bitcoin as legal tender in 2021 as part of a futuristic vision to reinvigorate El Salvador’s economy.
- So far it has been a moderate failure, with few citizens using BTC and poverty sweeping through a stunted Salvadorian economy.
- Bukele has maintained immense popularity despite financial struggles, with gang violence reduced and tourism increasing.
- Bukele is almost certain to win another term of office – something that is typically unconstitutional in El Salvador.
El Salvador is best-known among the crypto community for being the first nation to officially allow Bitcoin (BTC) to be used as legal tender. This meant that residents could use the digital currency as they would cash – in exchange for goods at most local merchants, pay for taxes, and so on. If this all sounds a little fantastical, wait until you hear what Bukele has in store for his next presidential term, as he races toward securing another win in the upcoming election.
Volcanoes and Bitcoin City: The Next Era for El Salvador
When Bukele first announced BTC would be legal tender in El Salvador, he painted the picture of “Bitcoin City”. The goal was to create a low-tax environment where everyone used digital currencies. The economy was to be fuelled with a huge investment fund of BTC. Best of all, the entire city was to be powered thanks to geothermal activity from a nearby volcano. Although Bitcoin City is yet to be realised – and probably never will – it demonstrates the almost outlandish futurism that Buklele associates BTC with.
However, El Salvador’s first few years as a Bitcoin haven hasn’t been without its ups and downs. Although recent months has seen the price of BTC surge in response to the U.S. ETF approval, the average El Salvadorian doesn’t really see the impact of these positive movements. According to a local, it is “unusual for someone to use bitcoin…the cost of my tomatoes and onions has doubled, and people are worried about low employment and salaries”.
In fact, since 2019, the amount of poverty in the Central American nation has doubled.
Despite the crippling economic troubles Bukele has only grown in popularity through his presidential campaign, as his hard-line stance on crime has helped tackle gang violence in the impoverished nation.
Interestingly, El Salvador typically employs a one-term policy to its presidents, to avoid authoritarian reigning over democracy which has been a feature of other Central American nations. However, so impactful has Bukele’s first term been on reducing violent crime that citizens are willing to overlook what’s termed “authoritarian drift” – to the point he has nearly 80% support even with the economy struggling significantly.
Bukele doesn’t mind the labels though. Just look at the translation of his X bio from 2021:
“World’s coolest dictator”.
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