Dressed all in white, with his cap back to front, Naib Bukele exults: “We will build Bitcoin City! The President of El Salvador speaks in English to an audience of foreign “Bitcoiners” who came to Bitcoin Week in the first country to adopt a crypto asset as an official currency on September 7, 2021. “It will be a real municipality, with a mayor and everything! A free zone powered by the geothermal energy of the Conchagua volcano that will also be used for mining, the energy-intensive calculations used to authenticate bitcoin transactions, promises the Head of State. He announces that 1 billion cryptobonds will be issued to fund this monumental project. dollars (1 billion euros).
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It was November 20, 2021. Nine months later, the stone had still not been laid. And no crypto bonds were issued. The international context is to blame: “All markets are turned upside down due to Covid-19, galloping inflation and the war in Ukraine,” says Economy Minister Alejandro Celaya.
The authorities continue to defend their decision to make bitcoin legal tender. And they attribute this to the expected increase in foreign investment and the fact that international tourism has returned to pre-pandemic levels. About fifty bitcoin-related companies have already settled. Stacey Herbert and Max Kaiser, a pair of American cryptocurrency journalists, were drawn to the opportunity presented to Bitcoin investors. They created a fund to finance startups that contribute to the “hyperbitcoinization” of the country. “Bitcoin is the future of El Salvador,” says Herbert.
Jorge Cruz Rubio, a coffee maker, created his Satoshi Specialty Blend line in their honor (a reference to the bitcoin creator’s pseudonym). On the package is an orange letter “B” and an anonymous mask. Mr. Cruz offers discounts if the purchase is made in bitcoins. “This currency is a way to make transactions with the whole world from my plantation in Ahuachapan, instead of spending hours in the city and paying commissions,” he explains.
However, a year after the introduction of this currency, the results are mixed. If the bitcoin law has propelled El Salvador to the forefront of the international stage “for anything other than the violence of its gangs,” cheers Mr. Zelaya, its use by the public is far from it.
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