Bitcoin Turns Into Badcoin In El Salvador But Prexy Wants More Of It
Salvadoran President Nayib Bukele’s experiment in making Bitcoin an official national currency alongside the US dollar, which has been the currency since 2001, has not gone well.
Photo Insert: Nayib Bukele’s financial problems remain as El Salvador, the country he leads, can’t print its own dollars.
But when a con artist’s grift starts to fall apart, he knows to move onto the next one fast. The same goes for fast-talking presidents, David Gerard stressed in an analysis carried by the Foreign Policy.
The author of “Attack of the 50 Foot Blockchain,” Gerard said more than 91 percent of Salvadorans want dollars, not bitcoins. The official Chivo payment system was unreliable at launch in September—the kiss of death for a new system. Users joined for the $30 signup bonus, spent it or cashed it out, then didn’t use Chivo again.
The system completely failed to check new users’ photos, relying solely on their national identity card number and date of birth; massive identity fraud to steal signup bonuses ensued.
Bitcoin’s ridiculously volatile price was appreciated only by aspiring day traders. Large street protests against compulsory Bitcoin implementation continued through October. The government stopped promoting Chivo on radio, TV, and social media. Chivo buses and vans were seen with plastic taped over the company’s logo.
Bukele’s financial problems remain. El Salvador can’t print its own dollars, so Bukele urgently needs to fund his heavy deficit spending. The International Monetary Fund has not lent the country the $1 billion Bukele asked for, and has indicated its strong concerns about the Bitcoin scheme.