Mainstream Salvadoran media criticized the president Nayib Bukele for his silence on the first anniversary of the adoption of Bitcoin (BTC), with many media and organizations calling the initiative a “failure”. Bitcoin was adopted as legal tender exactly one year ago yesterday, but the event was celebrated without the slightest fanfare by the government – and with BTC prices continuing to crash, media analysts have not spared their criticisms.
El Diario de Hoy newspaper cited economists who criticized the government’s lack of transparency regarding BTC spending. So far, everything Salvadorans know about state spending on BTC and BTC-related investments has been gleaned from Bukele’s Twitter posts on the subject.
A financial expert called the government’s activities “improvised and opaque”, noting that BTC spending had left the country in a “negative financial balance”.
Others claimed that infrastructure spending for foreign bitcoiners hoping to set up shop in El Salvador was also causing financial hardship. The Economist Jose Luis Magana was quoted as stating:
“Throughout the year, we have seen an increase in investment in Bitcoin-related real estate projects, fueling the real estate speculative bubble in the country.”
In a separate article, the same media quoted the Central American Institute for Fiscal Studies (the Central American Institute for Fiscal Studies), which said the Bukele government’s lack of transparency regarding its plans to adopt BTC was “alarming.”
The body called on El Salvador to reverse its decision to grant BTC the status of legal tender, explaining that the adoption of this currency had been accompanied by “significant costs for Salvadoran society and without any tangible benefit”.
Another major media outlet, La Prensa Gráfica, said the adoption of BTC hurts positive relationships with organizations such as the International Monetary Fund.
The same media quoted Jaime ReuscheSenior Analyst in the Sovereign Risk Group of Moody’swho said:
“[L’adoption] resulted in more costs than benefits. The main cost observed is how it affected foreign investors’ perception of risk towards El Salvador.”
Foreign media have been equally scathing – Bloomberg writing that Bukele’s “experiment” was a “revolution” which did not “give the expected results”. Reuters said the BTC project was “stumbled”.
On Twitter, Bukele retweeted several messages from bitcoiners rushing to his defense. It also share a message claiming that he would soon write an opinion piece on the subject titled “Stop Drinking The Elite’s Kool-Aid“.
Bukele also directed his followers to a thread of Paolo Ardoinothe technical director of Bitfinex.
Ardoino wrote:
“The citizens and government of El Salvador are brave. They know that change will not happen overnight.”
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