'El Salvador Had a Bitcoin Revolution. Hardly Anybody Showed Up' (yahoo.com) 64
It's the one-year anniversary of El Salvador's adopting Bitcoin as a legal tender, so Bloomberg follows up, finding a country where "Adoption has moved slowly, and steep declines in Bitcoin's price from those lofty levels last fall have dampened the early euphoria that swept across the nation."
"Bitcoin hasn't replaced El Salvador's hard currency, the U.S. dollar — it's not even close — but it also hasn't brought the financial ruin that some warned of either. Or not yet anyway." "No one really talks about Bitcoin here anymore. It's kind of been forgotten," said former El Salvador central bank chief Carlos Acevedo. "I don't know if you'd call that a failure, but it certainly hasn't been a success...."
As part of the rollout, Salvadorans were offered government-issued digital wallets preloaded with $30 worth of Bitcoin to help kick things off. Under the law, taxes can be paid in Bitcoin and businesses should accept it as a form of payment, unless they are technologically unable to do so. But the coin's volatility has spooked users, and cryptocurrency has seen broader acceptance in countries with poor payment networks or strict currency controls, such as Argentina, Venezuela and Cuba, Acevedo said. "In El Salvador we have a good payments network, so why transfer money with cryptocurrency?" he said.
Most Salvadorans haven't poured large amounts of money into Bitcoin, saving many from the recent bear market, Acevedo said. The same can't be said of the government itself, which started purchasing the token last year in the run-up to its launch as legal tender and has continued to add to its stockpile, conspicuously "buying the dip" during periods when Bitcoin declined. The result? It's sitting on losses. [Later the article points out "The government's 2,381 Bitcoin bought with public funds are worth $47.2 million at current prices, less than half what the administration paid for them."] A series of recent surveys found that only a relatively small minority of respondents continue to use digital wallets and few businesses have registered transactions in Bitcoin. And the central bank says only 2% of remittances have been sent via cryptocurrency wallets.
The government is still claiming victory, however. Bitcoin has attracted foreign investment and tourism and increased financial access to a largely unbanked population, according to Finance Minister Alejandro Zelaya. The government says its digital wallet, Chivo, has more than 4 million users. Tourism is on pace to surpass pre-pandemic levels this year and the central bank says 59 cryptocurrency and blockchain companies have registered offices in El Salvador.
Other observations from Bloomberg:
"Bitcoin hasn't replaced El Salvador's hard currency, the U.S. dollar — it's not even close — but it also hasn't brought the financial ruin that some warned of either. Or not yet anyway." "No one really talks about Bitcoin here anymore. It's kind of been forgotten," said former El Salvador central bank chief Carlos Acevedo. "I don't know if you'd call that a failure, but it certainly hasn't been a success...."
As part of the rollout, Salvadorans were offered government-issued digital wallets preloaded with $30 worth of Bitcoin to help kick things off. Under the law, taxes can be paid in Bitcoin and businesses should accept it as a form of payment, unless they are technologically unable to do so. But the coin's volatility has spooked users, and cryptocurrency has seen broader acceptance in countries with poor payment networks or strict currency controls, such as Argentina, Venezuela and Cuba, Acevedo said. "In El Salvador we have a good payments network, so why transfer money with cryptocurrency?" he said.
Most Salvadorans haven't poured large amounts of money into Bitcoin, saving many from the recent bear market, Acevedo said. The same can't be said of the government itself, which started purchasing the token last year in the run-up to its launch as legal tender and has continued to add to its stockpile, conspicuously "buying the dip" during periods when Bitcoin declined. The result? It's sitting on losses. [Later the article points out "The government's 2,381 Bitcoin bought with public funds are worth $47.2 million at current prices, less than half what the administration paid for them."] A series of recent surveys found that only a relatively small minority of respondents continue to use digital wallets and few businesses have registered transactions in Bitcoin. And the central bank says only 2% of remittances have been sent via cryptocurrency wallets.
The government is still claiming victory, however. Bitcoin has attracted foreign investment and tourism and increased financial access to a largely unbanked population, according to Finance Minister Alejandro Zelaya. The government says its digital wallet, Chivo, has more than 4 million users. Tourism is on pace to surpass pre-pandemic levels this year and the central bank says 59 cryptocurrency and blockchain companies have registered offices in El Salvador.
Other observations from Bloomberg:
- While El Salvador's president remains popular, a May poll by a local university found 71.1% of respondents said the Bitcoin law didn't improve their family's finances.... "If you go to any market in El Salvador, you're more likely to receive an insult than be able to purchase something in Bitcoin," said the director of the university's public opinion institute. "It's not a part of people's daily routine."
- The IMF "has held off on approving a $1.3 billion program for the country citing risks from Bitcoin."
- Plans are still on for a Bitcoin-backed "volcano token".
Gill Scott Heron (Score:3)
Bitcoin is superfluous (Score:3)
"The government says its digital wallet, Chivo, has more than 4 million users."
And why did you need Bitcoin for implementing a national digital wallet, exactly?
Face it, guys, you got grifted.
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And why did you need Bitcoin for implementing a national digital wallet, exactly?
Please feel free to list all those alternate-coins that would have instilled as much trust. And yeah, I know how little that's saying.
About as little as you gave this comment actual thought.
Re:Bitcoin is superfluous (Score:5, Insightful)
I think the issue is the idea that you need any type of blockchain or coin to implement a "digital wallet" of any shape.
I can purchase most anything today with the credit card linked to my phone. My pay gets deposited into my bank account automatically. Al of my financials are available on my phone or PC. How is this not a digital wallet by any sense outside pedant semantics?
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Re: Bitcoin is superfluous (Score:2)
Well that's pretty silly. If you want to have the economic independence that comes from native currency control you need the economic foundations to support it.
You can have the USD as currency and not be subject to those factors if you don't need them. Bitcoin or the USD is not what's going to lift the citizens out of poverty and create growth and wealth.
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My cynical self sees this and thinks that someone in the government there thought they could use their position to pump the price of bitcoin.
Re: Bitcoin is superfluous (Score:1)
None of them are trustless! :(
How does one miss the 1 and only usp of btc
That may not matter to many in developed countries. Not yet anyway.
It does for many with shitty Govts & other isssues
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Then the issue is the shitty government and other issues that are preventing "traditional" payment systems from taking hold.
a corrupt government with bitcoin is still corrupt, bitcoin wont and cant fix that.
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Please feel free to list all those alternate-coins that would have instilled as much trust.
DogeCoin, of course. The single most trustworthy cryptocurrency of them all.
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Speaking of giving comments little thought, why is it that you are focused on "alt-coins" rather than ... you know ... the banking systems which have setup and run economies for many generations?
Again the OP is right, you don't need Bitcoin or any of your "alt-coin" bullshit to implement digital wallets. The world had them long before bitcoin arrived and while you talk about trust, I place infinitely more trust in a nationally insurance backed bank with active fraud protection measures which limit liability
Re: Bitcoin is superfluous (Score:2)
The price swings of bitcoin is also making it a dangerous currency.
Tourism has nothing to do w/ bitcoin (Score:5, Insightful)
I would love to visit El Salvador. The country is beautiful, has amazing archeology, and the food is delicious.
The only thing stopping me is all the violence. Clean that up, and I'm there.
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The only thing stopping me is all the violence. Clean that up, and I'm there.
As opposed to the United States?
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Yeah, it's quite a bit worse in El Salvador.
Re:Tourism has nothing to do w/ bitcoin (Score:5, Interesting)
Really, if you take out those Democrat-run cities ( and apparently still count the crime rates in places controlled by the other party https://en.wikipedia.org/wiki/... [wikipedia.org] )...
you think America jumps over 20 places in safest place in the world to reach number 1 https://govisafree.com/safest-... [govisafree.com] ?
I mean, I agree with your point that for safety United States is better than El Salvidor but when it comes to everything else you said...
> but hey, we can't all be non-liars and non-idiots.
I can see that
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Replying to undo misclick moderation.
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if you stay out of a [rather short] list of Democrat-run cities, the U.S. is the safest place in the world
If you remove the list of most violent cities in USA, you need to do this as well in the countries you are comparing to. In the end you are looking at violence in rural areas.
The rate of homicide in USA was 5 per 100,000 in average, while in small areas it was 3.0 per 100,000 https://www.ruralhealthinfo.or... [ruralhealthinfo.org] This is 5x-10x higher than many other developed countries, S.Korea and Spain 0.6, Italy 0.5, Japan 0.3 (average for the entire country including their more violent cities, the countryside is going to b
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It's well known that if you stay out of a [rather short] list of Democrat-run cities, the U.S. is the safest place in the world - but hey, we can't all be non-liars and non-idiots.
No but apparently you can be selectively dishonest. Pretty much every major city in every US state is Democrat controlled thus there is not a link to poorly run cities and Democratic control as you seem to be trying to claim here because Democrats control almost all of them.
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In 2019, El Salvador had 36 murders [elsalvadorinfo.net] per 100k residents. The US had 5.0 [fbi.gov]; if El Salvador was a US city, it would have been 5th highest [cbsnews.com], between Dayton OH and Detroit MI.
Since then, the US's murder rates have gone up and El Salvador's have gone down quite a bit, but the estimate for 2022 (from my first link) is still 12.2 per 100k, still quite a bit higher than the US rate. So they're getting better quickly, but still worse than the US.
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It's not just the murder rate, it's the likelihood of being targeted. If you're driving down the highway in El Salvador, there are highway robbers. Tourist spots are seen as good targets for robbery. Occasionally gang members will board a bus and rob everyone, sometimes killing people. Kidnappings are common.
Whereas if I'm driving down the highway in America, I'm not worried about highway robbery.
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Whereas if I'm driving down the highway in America, I'm not worried about highway robbery.
Me neither. Until I pull into a gas station.
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Depends where you are in the US.
DC is 28 per 100K. I'm in NH which is 0.9 per 100K (lowest in US)
In NH 1/3 of people are strapped on any given day. Incentives work out as expected. Inverse for DC.
Pretty sure El Salvador still infringes RKBA so highway robbery sounds just right (criminals have illegal arms typically).
Taiwan does too so they'll get conquered.
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NH has a density of 147 persons per square mile where DC has 10,984 people per square mile. What works for highly rural areas doesnt work for urban city centers and vice versa.
also like most major cities a blanket rate for the whole city only tells part of the story, classic case of Chicago which always is routinely puroported as highly dangerous the murder and violent crime is very localized. Anyone who has been to DC or any large metro knows there are highly affluent and safe areas, probably safer than m
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If you're driving down the highway in El Salvador, there are highway robbers.
Oh, yes. They're called 'the police'. Bribes are customary.
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That doesn't sound like El Salvador, though.
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Even in the more violent countries and cities there are parts for the tourists that are
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Even in the more violent countries and cities there are parts for the tourists that are safe. The criminals know that killing a tourist draws a lot of heat and so the gangs won't go after anyone
That might be true in Chicago, but it's not true in El Salvador.
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As opposed to the United States?
If you think the United States is some high-crime shithole where people are afraid to visit then man you really need to get out of your palace at some point.
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Meh, it's fine. A friend of mine took his children there on vacation just a few years ago. He had lived there for a while after he was first married and wanted to share part of that experience with them.
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Where did they go?
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I'm not sure off-hand. I'll try to ask him later today and let you know.
They'll be happy in the end (Score:1)
The USD is on a pretty good downward slope from here, the government (and people) of El Salvador will be pretty happy there's a national alternative to USD without about five years I'd say.
The value of USD appears to be going up currently but that is only because of the troubles that other currencies is doing even worse than the USD... at 9% inflation per yer the value of USD is melting away rather rapidly, especially when you consider the effect of compounding on that decline.
Mind you I still don't think i
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Ok where to start....
Yes we have much higher than normal inflation and the economy is clearly teetering so investing in stocks is a bad idea, cash is a bad idea long term, bonds are a bad idea and as you noted other countries are even more messed up.
I wouldn't put a penny into any European country until they sort out their Putin energy dependency and have a solid local energy infrastructure.
I wouldn't put my money into China, they're hosed. Even if I did trust their government which I don't.
Japan, nope.
Sou
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So where then if not the US?
Same answer as it has been, for thousands of years when fiat currencies get ready to die... gold and silver my friend. Or basically anything real, that has value to other people.
Or, if you must have a currency, Russia is looking really good these days, it's been on a consistent upswing vs. the USD. They have a very low debt to GDP ratio and a ton of real commodities they can sell.
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Russia is a criminal enterprise.
Gold and silver have a long term piss poor record compared to almost everything else since I was a high schooler and first started paying attention to the economy and finance. It's fine to buy some if you want to spread your risk but I don't have any and don't see why I should.
I thought pot companies would do really well once it was essentially legalized but it turns out drug sellers who use their own product don't make for good business people. Go figure.
Re: They'll be happy in the end (Score:2)
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I was watching but didn't buy in. They will not boom. They're all very poorly run. Their problems have nothing to do with the Feds and everything to do with every single one of them being poorly run. If I could have found one that was even moderately run or just not poorly run I would've put real money in. Literally every single one is very poorly run. Very frustrating especially now that the easy money bull era is wrapping up after 10+ years and we're headed into years of shit.
Re: They'll be happy in the end (Score:2)
Yeah, if it wasn't for that pesky problem with leaning dangerously close and still leaning closer to all out fascism, and that unjustified and downright savage war with their neighbor, Russia would be a pretty good place.
Such a surprise (Score:3)
Sure, most people are not very smart. But only a few are this abysmally stupid.
Should have done Ada/Cardano (Score:1)
The Cardano blockchain is highly energy efficient, extremely liquid compared to BitCoin, supports staking and smart contracts. It costs like $0.25 of Ada to move $50-$100 of Ada on the Cardano blockchain. At one point, they demonstrated moving $4B in a single day with only about $66k in network fees. You really couldn't ask right now for a better crypto for a country like El Salvador to use as an alternative to the USD than Ada/Cardano.
They did have a solution for that though... (Score:1)
The Cardano blockchain is highly energy efficient, extremely liquid compared to BitCoin
When El Salvador embraced Bitcoin, part of the deal was also making use of the Lightning network for Bitcoin payments to address both those points.
I don't know the crypto market enough to know how that would compare, but I just thought it should be mentioned they were not only using base Bitcoin.
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adopting a cryptocurrency with a central authority, especially an authority based in the US would be a huge mistake. what happens if Charles Hoskinson doesn't like your country? what happens when the US sanctions wallets at the protocol level?
Bitcoin is the only valid option because it has no central authority
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tl;dr: Don't buy tulips, hyacinths are the way ahead!
UPI (Score:2)
They didn't have a revolution (Score:2)
You can make payments (Score:2)
They're better off without the IMF loan anyway (Score:3)
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There always have strings attached to their loans.
Of course there is. No one ever lends you money without expecting something in return. That's not how anything in the world works. As to whether anyone is "better off without the IMF loan" that is entirely dependent on the unique and individual terms of the loan.
You seem to know them in detail, so post them here and let's discuss them and see if they make sense for El Salvador or not. They may not, but let's have a solid basis for the discussion first.
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Came here to say this. They withheld because El Salvador dared try to find their own way out of trouble without becoming a financial vassal of the West.
30 dollars (Score:2)
That initial $30 is not worth $30 now, it is worth much less now.
Volcano token? Aptly named (Score:2)
Nobody knows exactly when it's gonna blow, but we know it will eventually, and when it does, we're fucked.