Nayib Boucle, President of El Salvador. Photo credit: Alex Pena/Anadolu—Getty Images
Proof of State is Fortune Crypto’s Wednesday edition, where Leo Schwartz provides insider insight into policy and regulation.
On Sunday, El Salvador’s President Nayib Bukele won re-election in a landslide, receiving more than 85% of the vote. From the outside looking in, his victory seemed like a victory for a country once synonymous with poverty and gang violence. Under Bukele, El Salvador became one of the safest countries in Latin America, and widespread support for President Bukele grew. Mano Dura approach.
Bukele’s cheerleaders extend far beyond the small Central American nation, and Bitcoiners represent one of his most loyal legions of supporters. After all, Bukele declared that Bitcoin would become a legal tender in 2021 and continues to work with companies like Bitfinex and Strike to attract crypto investors.
The reality of Bukele’s rule is far more sinister. His tactics as president were repressive and anti-democratic. He fires five Supreme Court justices and replaces them with his allies, forces Congress to approve consecutive terms for the president and clears a constitutional path to re-election, and occupies the Capitol in chaos. sent troops for the purpose. He debated the crime bill, and in his harsh crackdown he rounded up thousands of innocent people.
Bukele’s reign has had all the hallmarks of a dictator, with his social media accounts touting him as “the world’s coolest dictator”, egging on his critics and even welcoming unions. He backs up his chosen title with a series of laws that press freedom groups describe as clear attempts at censorship.Naturally, his re-election Wounded Due to vote counting fraud.
Still, Bukele remains widely accepted by the crypto industry. When Rep. Ilhan Omar (D-Minn.) sent a letter to Secretary of State Anthony Blinken last week urging action on Bukele’s threats to democracy in El Salvador, she said: met In vitriol from an X blue checkmark crypto acolyte, one prominent Bitcoiner told her, “I need to go back.”
Supporters of Boucle outside El Salvador argue that extreme measures were necessary to resolve the country’s rampant occupation by gangs like MS-13, but this argument suggests that the violence is a serious threat to the U.S. It stems from policy and avoids the uncomfortable truth that Bouclet appears to be working directly with the establishment. It is a peacekeeping crime and does not address the root causes of conflict. Still, it is undeniable that Bukele achieved at least a temporary peace, which brought him widespread domestic support in a country that never recovered from the civil war that ended in 1992.
Even more worrying is that Bitcoiners are abandoning their core ideals. Satoshi envisioned an alternative financial system that would be in the hands of users, free from the control of autocratic governments and institutions. Even Bukele’s rollout of Bitcoin was in stark contrast to these founding principles.
I traveled to El Salvador in November 2021 to report on Bukele’s Bitcoin gambit, which had been going on for several months. Bukele’s government commissioned the creation of a custodial wallet called “Chibo” that Salvadorans could use to hold and trade Bitcoin, and even seeded the wallet with $30 worth of Bitcoin to encourage adoption.
Of course, this development was a disaster, partly because cash-based people didn’t want to switch their daily transactions to unstable cryptocurrencies, and partly because bugs and security issues hampered the launch. That was to be expected, but Bukele’s approach was even more sinister. It was unclear who actually controlled the country’s cryptocurrency holdings, and his illusions of “not your keys, not your coins” were quickly abandoned. When speaking with Bitcoiners from the United States who had traveled to visit the supposed promised land of cryptocurrencies, many learned that Bukele’s opaque launch was actually just a PR stunt. I was disappointed.
Not much has changed. Bukele has succeeded in attracting big names such as Max Keizer, Jacques Mallars and Paolo Ardoino to the country, but the adoption rate remains close to zero, with companies such as Bitcoin City and Volcano Bonds The promised efforts have yielded no results.
As Bitcoiners like to say, don’t trust. confirm.
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