By: Andrew Lu
Despite cryptocurrency’s recent crash, El Salvador’s President, Nayib Bukele announced that the government will buy one Bitcoin per day from now on.
Bitcoin, the largest and most well-known cryptocurrency is based on crypto mining and using data and numbers to make a specific code, in order to create a block in the block chain. Miners with computers that mine data produce these codes and it is rewarded one Bitcoin. This is how cryptocurrency is made
Last year, Bukele made Bitcoin a legal currency in the country. Later, he decided to sell $1 Billion in the so-called “volcano bonds” funds to back government debt. He hopes to use the money to build Bitcoin city in the future.
It’s difficult to understand why Bukele is buying that much of cryptocurrency. Recently, he stalled a negotiation with the International Monetary Fund (IMF) to burrow $1.3 billion and decided to sell bonds and talk business with China. Few experts believe El Salvador’s Vice President, Felix Ulloa’s claim that China supports the country in its current state of an all-time high debt of $21 billion.
Based on his purchase announcements, it is believed that Bukele has spent $107 million on Bitcoin, and another $200 million on support and administration. Sadly, El Salvador’s current Bitcoin holds dropped down to $40 million.
Even worse, the citizens of El Salvador don’t appreciate cryptocurrency. In a recent study by the Jose Simeon Canas Central American University of 1,269 Salvadorian residents, only 17% said it was a success. 66% of people said it wasn’t helpful, and 77% of people think they should get rid of cryptocurrency.
But surprisingly, even after all the Bitcoin plans, Bukele’s approval rating is still very high and has not dropped since he stepped up to the position in 2019. This is probably because of the criminal rate dropping in the county. But, why is he so obsessed with cryptocurrency? Bitcoin is giving the president exactly what he wants. He needs the news to cover up other things happening in the country. Bukele took the media focus from gang violence in the country and put it on cryptocurrency. Behind the scenes, Bukele has been dealing with authorities that are a pain in the gut and firing supreme court members that don’t agree with him. Also, he launched a new bid that somehow secured him in position for the next presidential term in 2024.
In El Salvador, cryptocurrency is a key part of Bukele’s plan to change the country into a fresh and new place, giveopportunities to the newer generation, and challenge other western financial giants.
That means Bukele will keep up with the Bitcoin thing for a long time. Tiziano Brenda, Central America analyst at Crisis Group said, “It’s Bukele’s ultimate [goal] to rebrand the country. And he doesn’t seem like a person who can admit failure. He will go until the last consequences of this experiment.”