Crypto

El Salvador’s “Bitcoin Davos” Wasn’t Really Related to Cryptocurrencies

Representatives of 44 banking institutions gathered in El Salvador for a summit on financial inclusion. President Naib Bukele focused on bitcoin, but central banks didn’t just talk about it.

Some have gone as far as to talk about “Bitcoin Davos”, referring to the famous world economic forum. Representatives from 44 central banks and financial institutions were invited to El Salvador, and President Naib Bukele tweeted their arrival as a strong signal for Bitcoin adoption around the world. In the absence of a clear announcement, many have interpreted the conference as being about cryptocurrency.

However, this was not really the case: it was primarily a summit organized by AFI, the Alliance for Financial Inclusive, a Malaysian organization. The purpose of the meeting was to discuss the best ways to achieve broader banking integration – and while part of the discussion was about bitcoin, it was not a meeting entirely dedicated to cryptocurrency adoption.

Naib Bukele, President of El Salvador // Source: Wikimedia Commons

What were the bankers talking about?

It was Paraguay’s central bank, whose representative was on the trip, who first issued a press release to rectify the situation. In its message, the institution clarifies that “the session is not about cryptocurrencies” and reminds that crypto assets were not considered legal currencies in the country. “The Central Bank of Paraguay does not intend to discuss the adoption of cryptocurrencies under the AFI.”

So what were the bankers talking about? According to AFI’s program, during this “week of events,” participants “had discussions on promoting digital ecosystems and financial innovation” with the goal of “providing more help to small businesses, women, and low-wage workers.”

The group members also talked about the “emergence and regulation of digital private currencies in developing countries”, i.e. cryptocurrencies, as well as digital assets and stablecoins. Then few discuss the plans of the central bank to accept bitcoin as legal tender.

Central Bank representatives tried bitcoin

Therefore, statements that the meeting was dedicated to cryptocurrencies should be taken with a grain of salt. However, it is true that a panel was set up to discuss the profits of bitcoin, presented by Roman Martinez and Nicolás Berti, the two entrepreneurs behind Bitcoin Beach (the resort in El Salvador where bitcoin was first used). They spoke in detail about the history of the place and the developed payment systems.

bitcoin_beachCentral Bank Representatives at Bitcoin Beach // Source: Galoy

Representatives from financial institutions even visited Bitcoin Beach at the end of their stay to test crypto payments for themselves. Galoy, the company that developed crypto wallets for Bitcoin Beach, says the members of the group were able to “see what bitcoin is doing for communities excluded from the current banking system.” And Naib Bukele even took advantage of the visit to get them to take a break and make them scream “bitcoin”.

Even if AFI members are not currently intent on accepting bitcoin as legal tender, the symbol remains strong. Global financial institutions have historically opposed cryptocurrencies. The IMF has criticized El Salvador’s plan to adopt bitcoin, saying the country has “went too far” and European Central Bank President Christine Largarde recently said that cryptoassets are “worthless”.

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