Pierce says he is impressed by the government’s will. “This government is incredibly entrepreneurial,” he said. “They’re like getting things done at lightning speed.” He says he is working on organizing a “big conference” in the country.
Lauren Bissell, a former Cambridge Analytica employee who later converted to blockchain and Bitcoin entrepreneurship, and was part of Pierce’s delegation, says she is “more impressed” by the government figures she met during the trip.
Still, Bissel admits that the roadmap for adopting Bitcoin looks very ambitious. “There are going to be a lot of sleepless hours. There is a lot of work to be done, ”she says. “But I think the launch will be successful.”
With the Bitcoin Day countdown just 69 days away, the nuts and bolts needed to make cryptocurrency work as legal tender are still a mirage. Athena, a company that had initially been approached to install 1,000 ATMs in the country (and challenged by Bukele on Twitter to roll out 1,500) will start with just 14. Going from volcanic emojis to reality will also take time. “What you have in El Salvador is, apparently, an abundance of geothermal energy and, at least for now, friendly jurisdiction,” said Alex Brammer, vice president of business development at Luxor, a crypto mining company. change. “Providing the infrastructure there is going to take years. Even the Bitcoin law looks like an unfinished business: its overhaul of a whole new monetary system is hastily sketched out in two pages and 16 articles, which is why a more detailed regulation is expected to be released soon.
What is Bukele’s game really like? An oft-repeated case for its move is that Bitcoin would “bank the unbanked”. This dusty mantra is usually nonsense, but it might have some merit here, as 70% of the population of El Salvador either does not have a bank account or do not have access to easy payment solutions. According to this line of thinking, a government-backed Bitcoin wallet, as a smartphone app, could arguably reach more people than existing banking providers, and could offer a convenient, low-commission way for the diaspora. Salvadoran to return remittances. A Small-scale Bitcoin project in El Zonte– a seaside town in northern El Salvador – has moderately been successful in making the local economy work more efficiently and is credited with inspiring Bukele. In this reading, Bukele is the daring maverick who uses liberating technology to lift his people out of the state of deprivation that financial institutions have thrown them into.
There are problems with this narrative, however. Some have pointed out that only 45 percent of the country’s population has Internet access and an Internet connection will be required to use the application. Ricardo Barrientos, chief economist at ICEFI, a Guatemala-based research institute specializing in tax studies, predicts that Bitcoin will be treated as a “weak currency”, with employers keeping their savings in dollars and using Bitcoin more volatile to pay the wages of their workers. “This class division could trigger social tensions, it is a recipe for disaster,” says Barrientos. The report Barrientos co-authored for ICEFI on this topic subtly suggests that by making Bitcoin legal tender without installing anti-money laundering controls, the government is considering encouraging a “certain type of acquisition or investment” in creating a parallel market where “dark operations” can take place.
Barrientos expects Bukele to backtrack before September 7 under pressure from international financial institutions and some of his own advisers. If that doesn’t happen, Barrientos is hopeful that Bitcoin won’t spread among the population. “The best case scenario is that no one uses it and everyone continues to use dollars, except for some narcos,” says Barrientos. “I hope there will be natural debitcoinization.”