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El Salvador’s presidential election on Sunday, February 4th will determine whether Nayib Bukele and his Bitcoin revolutionary experiment will continue to have a presence in the country’s future.
Nayib Bukele has enjoyed a fairly broad support base since becoming El Salvador’s president in 2019. He was the first person to win independently from either of America’s two major political parties since 1984. But the topic that made his administration a topic of global discussion was his support for Bitcoin. Bukele made world history by elevating it to the status of fiat currency in September 2021, and El Salvador’s radical experiment with Bitcoin has captured the world’s attention ever since.
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Not surprisingly, much of this attention has been negative, especially from financial and media institutions around the world. The Bitcoin Act came into effect just weeks before Bitcoin fell from its all-time highs, leading to considerable speculation that the government would suffer significant losses as a result. More urgently, financial institutions such as the IMF also repeatedly urged El Salvador to abandon the project, raising the possibility that El Salvador would not be able to receive loans. However, as of 2024, not only has the government’s investment in Bitcoin reserves remained firmly in the black, but major financial institutions have also reluctantly accepted the strength of El Salvador’s economy. Critics of the state from this angle have been refuted, but another immediate test is just around the corner. This is the issue of Bukele’s re-election.
In a January 31 interview, Bukele’s running mate Felix Ulloa went to great lengths to emphasize that re-election would mean a firm rededication to Bitcoin. Ulloa said the IMF has been quietly repeating its requests to delist Bitcoin in El Salvador, but claimed these pleas are being ignored. He claimed the source of special power as follows: Reuters, which was a leap forward for ETFs in the United States. Big wins like these mean to him that Bitcoin “enjoys the greatest credibility in the world.” Ulloa not only insisted that existing laws supporting Bitcoin “will be maintained”, but also added that the proposed “Bitcoin City” infrastructure project continues to have the full support of the government.
As far as opinion polls are concerned, various international media organizations all agree that Bukele’s victory is virtually guaranteed. The core of his popularity actually seems to have nothing to do with Bitcoin. Because many citizens are still unconvinced. Instead, his sweeping crackdown on gang activity appears to be the main reason why El Salvador’s murder rate plummeted from 105 per 100,000 residents in 2015 to 7.8 per 100,000. That said, while his voters broadly love him, they remain ambivalent about the Bitcoin initiative as of yet. This fickle support can actually be dangerous. Because future economic hardships may turn this indifference into outright denial. But as all the opinion polls show, Bukele will have another term to convince the people.
Fortunately, there are extensive plans in place to deepen this connection in many areas of life. The use of international currencies such as Bitcoin has driven international spending flows, with tourism to the country surging in recent years. In addition to these more haphazard inflows of cash, governments have also encouraged more permanent immigration by allowing foreigners to purchase citizenship directly with Bitcoin investments. While these attempts to raise foreign currency can certainly have an impact on the population, efforts are also underway to create jobs directly in the burgeoning industry.
Since last October, El Salvador has partnered with several companies to build mining infrastructure powered by geothermal energy. Bitcoin mining is a growing market globally, and using green energy easily avoids the most common objections. These goals of creating domestic jobs and attracting foreign investment are all within the scope of the aforementioned “Bitcoin City” project, an initiative with the long-term goal of fostering a variety of jobs in software development and blockchain engineering related to the digital asset space. . .
If El Salvador’s voters decide to re-elect Bukele on February 4, he will have his work cut out for him to ensure Bitcoin continues to exist. Still, many of his citizens are participating in generating additional revenue from overseas travelers interested in Bitcoin or building new pools to mine it. Although the economy was growing, this was not enough to attract his people to the full potential of a radical new economic future. Nevertheless, he somehow won their love, as his government continued to enjoy enthusiastic public support. That means he has a very good chance of being re-elected, and the experiment will continue during his second five-year term. But the main challenge in these five years is to ensure that Bitcoin becomes a reality of people’s lives. Nonetheless, as difficult as this may seem, he is already working to normalize Bitcoin in a variety of ways.
As one example of this, last year the country partnered with one of the largest retailers, allowing numerous businesses to begin accepting Bitcoin for the most everyday transactions. Moreover, these normalization efforts extended beyond El Salvador’s borders. El Salvador needs support from its citizens, but it also wants to encourage broader support from other countries. The Central African Republic (CAR) took direct inspiration from El Salvador when it became the second country to adopt Bitcoin as its fiat currency. However, these efforts were halted in 2023 as they were impossible to sustain in a country where approximately 90% of citizens do not have internet access. CAR was not the only country affected by the Bukele government. A ‘Bitcoin ambassador’ to Argentina was appointed in conjunction with the election of Argentina’s new president in November last year. Promotional efforts like these will go a long way toward making El Salvador the first country to accept Bitcoin as fiat currency. But it won’t be the last.
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Some of these initiatives highlight that El Salvador’s Bitcoin project has fundamentally different goals than the ETF battle in the United States. Even though Salvadorans like Vice President Ulloa are naturally excited about the victory. ETFs are financial tools that provide ordinary Americans with an additional opportunity to indirectly benefit from the success of Bitcoin, which has a radical vision of putting everyone in the world in control of their economic fortunes. there is. Nayib Bukele has shown a genuine interest in fostering Bitcoin as a part of everyday life through international outreach and various ways to encourage economic development. Our community needs warriors like those pursuing the ETF wars, but it’s important to remember that Bitcoin is much more than a way to earn fiat. If Bukele has the opportunity to really embed Bitcoin into Salvadoran society, he will show the world what kind of success Bitcoin can provide for all of us.