sacha pfeiffer, host:
the president of el salvador is making a big bet on bitcoin with his country’s treasury. President Nayib Bukele hopes to borrow $1 billion to stock up on Bitcoin and build a Bitcoin trading zone near a dormant volcano. The plan has made him a hero in the crypto community, but as NPR’s Carrie Kahn reports, many worry it’s too big a gamble and possibly part of an authoritarian spin.
Reading: Salvador bitcoin president pressured accused
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carrie kahn, firm: just a few blocks from the crashing waves of el zonte beach on el salvador’s pacific coast, maria del carmen aguirre tends her little shop, where the bitcoin symbol is posted and accepted here .
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maria del carmen aguirre: (speaks spanish).
Kahn: “Thanks to my bitcoin earnings, I was able to buy a lot for my little shop,” he says, like a new pupusa griddle, El Salvador’s signature stuffed tortilla, and a new refrigerator.
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oh-oh (ph).
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del carmen aguirre: (speaks spanish).
kahn: (laughs).
As three large cows walk past us, the 51-year-old grandmother says she wasn’t an early adopter like many here in the community that’s been renamed bitcoin playa. she waited until the president made bitcoin legal tender alongside the dollar last September.
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del carmen aguirre: (speaks spanish).
Kahn: “If I had gotten in earlier, I would have been able to buy a car with my winnings,” says Aguirre. this is exactly the testimony that president nayib bukele loves to promote. he insists bitcoin helps millions here who don’t have traditional bank accounts, especially those hit by high fees for money transfers from relatives abroad. The 40-year-old leader, a voracious tweeter who prefers jeans and baseball caps to suits, has become a star among crypto backers around the world.
jaap-jaan vanhangel: we like him because when you follow him on twitter, he’s really funny, right? – with all the crypto memes.
kahn: brothers jaap-jaan and martin vanhangel from the netherlands, both in their early 20s, say they’ve been able to buy almost anything on vacation with bitcoin.
martin vanhangel: and we like to go here to support people who accept bitcoin, so, and see how it works. it’s great.
Kahn: But despite a strong economic recovery last year, El Salvador has real money problems. Bukele asked for a loan from the International Monetary Fund, but talks broke down after the IMF objected to his Bitcoin binge. Undeterred, Bukele has gone ahead with his link. he plans to use half of the proceeds to build what he calls bitcoin city, a tax-free zone located at the base of an extinct volcano fueled by geothermal electricity. the other 500 million will go to buy even more bitcoins. Jaime Reusche, vice president of Moody’s sovereign risk group, is among those skeptical that bitcoin can save El Salvador.
jaime reusche: it’s a great bet. this would be the first of its kind anywhere in the world.
kahn: moody’s estimates that el salvador could have lost as much as $22 million when the volatile currency crashed recently. Russia’s traditional investors are wary of bukele’s speculative use of the national treasury and other ways he is ruling.
reusche: However, the president seems emboldened by the fact that his popularity remains very high within the country.
Kahn: That’s because Bukele’s message is simple: He has expelled the corrupt elites who looted the country, says Alvaro Artiga, a political scientist at the Central American University in San Salvador.
álvaro artiga: (speaks Spanish).
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kahn: “and portrays all his critics as those old elites desperate to return to power”, says artiga. but there are many who say that the bukele government has become much more authoritarian. since he took office, he has fired independent judges and prosecutors and packed the supreme court with justices who have just cleared the way for him to seek re-election in 2024, despite a constitutional ban. he has also been accused of spying on journalists. Attempts to interview Bukele, his spokesperson and several leaders of his political party were rejected.
We officials also concerned about bukele have sanctioned top aides suspected of bribing gang members, and some in congress are concerned that using bitcoin in el salvador could hurt the united states. Finance system. bukele responded on that last point, tweeting, ok boomers we are not your colony. stay out of our internal affairs. bitcoin remains his big bet and he announces it repeatedly on national television.
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unidentified person: (speaks Spanish).
kahn: But many Salvadorans are still reluctant to adopt it. many of them immediately cashed in the $30 that bukele gave away in bitcoin last year to boost the use of the cryptocurrency.
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kahn: walking around the zonte – that’s the bitcoin beach – laura castro says she cashed in her bitcoin and invited her mom to dinner. She really likes what the president does, especially building roads and bridges.
laura castro: (speaks Spanish).
Kahn: But laughing nervously, he says, “It’s worrying that we don’t know what’s in store for our country’s economic future.” carrie kahn, npr news, san salvador.
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