The one that has been bundled in El Salvador. Since Tuesday became the first country in the world to accept Bitcoin As legal tender, the project looks more like a circus that the dwarfs do not stop growing: citizen protests, international criticism, technical failures and, as if that were not enough, an unusual collapse in the price of cryptocurrency.

It seems that the only ones satisfied with the measure are the representatives of the Government itself and the fans of the currency. While most of the world continues to try to understand the vast and complex universe of cryptocurrencies, the Salvadoran president, Here’s a look, has implemented Bitcoin in practically three months, with almost no public consultation or parliamentary debate.

That is why it is not surprising that 68% of the Salvadoran population surveyed by the Central American University is against the initiative, especially if it is taken into account that more than 95% of those consulted do not understand cryptocurrency nor does he know how to use it. Although this is also quite logical, given that it is estimated that about 70% of the Salvadoran population does not have a bank account.

Here comes one of the first arguments of Bukele, who argues that the introduction of Bitcoin will boost the banking of its citizens. However, it is hard to believe when you consider that only 45% of them have internet access.

Another of the president’s great assets to defend his project lies in avoiding the commissions that intermediaries keep on the money that migrants send to their families. The Government affirms that this saving could reach up to 400 million dollars annually, although according to calculations by the BBC, the real figure would be closer to 170 million dollars.

Whatever it is, given that remittances account for 16% of the country’s GDP, it seems that the measure would make sense in this regard. Nevertheless, these savings could vanish in the face of massive Bitcoin volatility, which is one of the main criticisms both by the population and by international organizations such as the IMF.

And for example, a button: after the entry into force of the cryptocurrency in El Salvador, its value plummeted an average of 10%. This means that, if the government invested, for example, $ 100 (the actual figure must be outrageously higher) to buy the 400 bitcoins with which it has launched the project, its current market price would now be $ 90. Although it is also true that Bukele took advantage of the fall to buy another 150 cryptocurrencies at a lower price.

It’s hard to believe that a crash has occurred, given that the Bitcoin community seems delighted with the Salvadoran move. In addition to welcome messages from heavyweights of the ecosystem, such as the Binance exchange platform, some of the biggest influencers of the cryptocurrency organized a massive coordinated purchase internationally to artificially increase its price.

It’s hard to believe that a crash has occurred, given that the Bitcoin community seems delighted with the Salvadoran move

But the numbers show that it didn’t do much good. According to several international analysts, the drop is due to the fact that the value of the coin had been inflated for months, so it had to come down sooner or later. Its entry into El Salvador would have been the last straw for several speculative investors, who have suddenly dissociated themselves from it.

To avoid the problems in price fluctuation, the Government claims to have created a trust of 150 million dollars with which it will compensate the possible losses in value suffered by the companies. That is, if a business sells a product at 10 bitcoins, but at the time of the transaction the cryptocurrency is worth a dollar less than when the price was set, the Government will return the lost euro to the merchant through that fund.

But how do you pay for that fund and all the money that has already been invested in the measure? Of course, with citizen taxes. But in an impoverished economy with a huge digital divide, gambling so much money at the expense of taxpayers seems foolhardy.

In an impoverished economy with a huge digital divide, gambling so much money at the expense of taxpayers seems reckless

To neutralize this criticism, Bukele defends that the entry of Bitcoin will serve to attract foreign investors with fewer obstacles and commissions. However, here lies another of the thorny issues of the project. It seems that behind the enormous and rapid push by the Government to introduce cryptocurrency in the country there are hidden some crypto entrepreneurs who might be rubbing their hands.

Although the arrival of the currency has been accompanied by a free digital wallet preloaded with $ 30 as an incentive, 200 ATMs to withdraw bitcoins in dollars and without exchange fees, most of the Bitcoin buying platforms charge users for acquiring new currencies.

If before the money remained in the hands of financial intermediaries, now it would remain in the hands of technology. In fact, the famous payment company Stripe and the crypto entrepreneur Mike Peterson They have long maintained operations in El Zonte, a small fishing town in the country that attracts surfing tourists and whose pioneering introduction of Bitcoin was the inspiration for Bukele’s daring financial maneuver.

If before the money remained in the hands of financial intermediaries, now it would remain in that of technology

In addition, even if the price of Bitcoin has suddenly plummeted, if other countries follow El Salvador’s example, the value of the currency would continue to grow, which is another great incentive for its promoters.

To these supposed dark business interests must be added the lack of transparency with which the Government has launched the cryptocurrency. Citizens are still not clear if all businesses will have to accept it compulsorily. Some time ago, the president even spoke of sanctions for those who did not, although now it seems that those who do not have technological capabilities may be exempted.

It is also not known what is the underlying technology with which the digital wallet works. This could have been the reason that the application was not available for hours on the main application download platforms, not meeting their security and privacy requirements. However, the president alleged technical failures and demanded that Apple and Google accelerate the launch of the app.

Two days later, the system appears to be working. Of course, those who downloaded the application found that the $ 30 incentive promised by the government was now worth less due to the crash of Bitcoin. But this is what happens when things are done in a hurry and without public consultation. El Salvador may have taken a good step towards innovation, but perhaps it should have taken it more slowly. There was no rush either, was there?

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