September, El Salvador Recognized cryptocurrency Bitcoin As legal tender. This program, led by President Nayib Bukele, means that government agencies and businesses can recognize it as a legitimate payment method.
Since then, the value of Bitcoin has fallen by more than half. So how are government bets affecting today’s El Salvadorans?
Jacob Silverman is a freelance journalist covering crypto space. He traveled to El Salvador with his reporting partner, actor Ben McKenzie.their Feature articles Recently published in The Intercept.
Silberman said the plunge in Bitcoin’s value undermines the government’s ability to repay catastrophic debt. But in general, it doesn’t destroy the daily finances of the inhabitants, as many people avoid Bitcoin altogether. Below is an edited transcript of the conversation between Silverman and Andy Uhler on the Marketplace.
Jacob Silverman: For people, that was certainly a problem. In other words, many people have lost money. I talked to many people whose personal information was stolen.But it simply caused a lot of people [to] Abandon Bitcoin and aren’t interested in it.some people I can’t access the internet, Some people don’t have consistent electricity. Some people just don’t want to get involved, they had that bad first experience. In that sense, I think it was a failure for the average Salvador. Evidence is actually in the remittance.About a quarter of El Salvador’s economy, GDP Use remittance Because there are many people living abroad.When Only 2% of remittances It is currently being sent via Bitcoin. This shows that established money transfer methods such as Western Union and MoneyGram seem to be sufficient for most people.
Andy Uhler: So if I’m in El Salvador, trying to spend money in El Salvador, or deciding not to interact with Bitcoin, how do I do that?
Silberman: In fact, the other official currency of El Salvador is the US dollar.So most of the economy there is done in cash, and About 70% of people Also, I don’t have a bank account. So, in reality, it’s a US dollar-based economy. That’s really good.We were also in places like the airport [the capital city] San Salvador, a great airport technically up-to-date. I had Bitcoin used to buy souvenirs. They asked for the dollar, saying they didn’t want to.
Wooler: You have a great line In this work, Calls the Bitcoin project “a mess of government and private interests”. What is the relationship between the Bukere administration and some private companies that may not be in El Salvador?It’s happening actively
Silberman: That’s right. And some of this is happening open. For example, many of these are run by iFinex Inc., the parent company of the major crypto exchange BitFinex, and by the highly controversial “stablecoin” Tether. It questions its business practices, including the US government. So we know that they are invited to draft a securities law that is to be passed by the Government of El Salvador.They have been deeply involved Distribute money It’s like giving out Bitcoin to people and spreading the Gospel of Bitcoin. The El Salvadorian government has not only chosen to provide Bitcoin to the public or to provide access to Bitcoin. There are many interested players and foreigners. And we don’t know exactly what we are all doing.
Wooler: Is there anything we can learn and add to the conversation about this kind of Bitcoin experiment?
Silberman: I think so. For one thing, it doesn’t work well as a currency because it’s illiquid and its value fluctuates so much. And, despite the legitimate issue of inflation, people need some reliable currency in that 1 Bitcoin is worth the same amount the next day. And when you see it being implemented by a government that is probably less credible, or a government that may be watched over by private interests, it is a democratic and liberal economic tool like it was panned. Will not be. Some people are already evacuating from Bitcoin Beach, where the area of El Salvador is highlighted by Bitcoin. That is, if Bitcoin is actually implemented in a country like El Salvador, it is actually a tool for private gain, and for the elite to enrich themselves. Its main booster claims isn’t really an economic lifeline.
Silberman, a freelance journalist, writes a book about cryptocurrencies and fraud with actor Ben McKenzie.their Intercept story It contains more context on how this experiment fits into Salvador’s life, the widespread gang violence there, and economic pressures such as increased external debt.
Rest of World, which covers the world’s technical stories There is an article Share more about El Salvador’s Bitcoin wallet app, Chivo. After all, the app suffered from many technical bugs and security flaws. 61% of consumers abandoned the app after collecting the first government inventions.
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