In an interview this week, the CEO of bitcoin payment company Strike said the Salvadoran experiment with bitcoin as legal tender had in no way hurt his business, noting that his only involvement in the project was that he gave advice to President Nayib Bukele.
He also said he thought it had been a success, in a CoinDesk interview on Thursday, September 29, asking if the Central American nation should copy what the falling pound is doing.
Comparing the government’s year-long experience with bitcoin joining the legal currency of the dollar to a duty, Jack Mallers of Strike asked when that was supposed to happen, suggesting that the anniversary of legal bitcoin on September 7 is not the end of the experiment.
“You’re talking about a country that has historically been crushed by inflation, crushed by banks like the Federal Reserve,” he added.
That said, the results have been dismal so far, considering how much the government has spent trying to convince people to use it – around $375 million, not including paper losses on its bitcoin holdings. – with so little success that, anecdotally, most merchants in San Salvador’s central business district stopped accepting him, despite being legally required to do so.
Read more: A year on, the Bitcoin currency experiment bombed
There’s remittances, which should be the sweet spot for sending money to El Salvador, as the country’s digital Chivo makes it free and real-time. Despite this, only 2% of remittances are sent through Chivo, and not all of that is bitcoin, as it can also be used to send dollars.
Beyond that, the wider financial damage includes alienation from the International Monetary Fund (IMF), which refused to provide a loan that will help it avoid a default in early 2023, and its sovereign bonds. have crashed to the point where their current value of around 40 cents on the dollar is up almost 50% since July, but down from $0.85 last September.
Bitcoin payments have mainly taken hold in countries where the local currency suffers from severe or hyperinflation – Argentina, which is 80%, for example, has this effect – but first of all, the El Salvador’s inflation rate is less than 8%, and second, it has no national currency to hyperinflate. The only other legal currency is the dollar.
Yet, while delivering a speech at the United Nations General Assembly last week, Bukele began with, “Bringing you greetings from the land of surf, volcanoes, coffee, peace, bitcoin. and freedom”, He then spent a good part of the speech to freedom, complaining about rich and powerful countries bullying their smaller neighbors – with a few jabs that were probably euphemisms for the International Monetary Fund.
“Freedom is something we always fight for in our country because even though we are free, sovereign and independent on paper, we won’t be until the powerful understand that we want to be their friends,” did he declare. according Criptonoticas. “Let our doors be open to build the best relationships… The essential requirement is that the powerful respect our freedom.”
See also: Integrate Bitcoin firmly into payments, Strike Partners with NCR, Shopify, Blackhawk
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