On Saturday, El Salvador's president, Nayib Bukele, formally began his second term in office. The new period of the presidency raises many controversies, both in the domestic and international arena.
At the same time, it is time to consolidate the $BTC project
Bitcoin, which revolutionized the country's economy. So let's take a look at the challenges Bukele is facing and verify the hopes related to the #Bitcoin project.
Bitcoin as a national currency
#Salwador is the first country in the world to adopt Bitcoin as a legal means of payment. This decision attracted the attention of millions of people around the world, especially cryptocurrency supporters. President Bukele introduced Bitcoin as a means of payment in 2021, hoping to improve the country's economic situation.
However, the government of El Salvador did not stop at introducing Bitcoin as a means of payment. Numerous policies are being implemented to support the use of cryptocurrencies in various economic sectors such as industry and commerce. Thanks to these activities, El Salvador is becoming an example for other countries interested in blockchain technology. The country's authorities decided to purchase Bitcoin on a large scale, which is aimed at increasing currency reserves and stabilizing state finances.
A bumpy road
President Bukele believes that the Bitcoin program is one of the best financial decisions of his government. The country has already accumulated significant reserves of Bitcoin and plans to continue purchasing this cryptocurrency. El Salvador is now purchasing one Bitcoin per day, a move aimed at increasing the country's economic stability and long-term profits.
Despite futuristic plans, El Salvador is struggling with serious economic problems. The country's public debt exceeds 84% of GDP, which is approximately USD 30 billion. Economic growth in 2024 is expected to decline to 3% from 3.5% in 2023. Critics blame the president for these problems, arguing that the introduction of Bitcoin has disrupted internal economic dynamics. According to them, the uncertainty surrounding cryptocurrencies has contributed to increasing financial risk in the country.
The second term is the subject of many comments and reflections from many different, well-known figures. In his post on the X social media platform about El Salvador's future under Nayib Bukele, Max Keiser shared some bold predictions. His vision assumes significant changes in the country's economy, based on the use of Bitcoin technology.
“The country's wealth will be controlled by Salvadorans who will run their own Bitcoin nodes. The president will present ideas to them, and they will fund the ones they like. The social contract will be reinvented by Bukele. El Salvador will operate on the Bitcoin circulation standard. The country will have no debt. El Salvador will control 10% of Bitcoin's global hash rate, using geothermal and volcanic energy (my vision "Volcano Energy"). No central bank will have power. The IMF will be forgotten.”
Controversies and political challenges
#Bukele is also struggling with accusations of violating human rights and violating the constitution. His opponents call him a "dictator" and his security policy is controversial. The new term is not only an opportunity for economic consolidation, but also a great political challenge. Bukele's opponents say his management methods are authoritarian and contrary to democratic values.
El Salvador has become the site of numerous protests, with citizens expressing their dissatisfaction with the difficult economic and political situation. International organizations also criticize Bukele's government for its lack of transparency and human rights violations. Despite these challenges, President Bukele enjoys significant support among parts of society who see in him hope for improving the situation in the country.
In the face of these difficulties, Bukele's second mandate becomes one of the greatest challenges in El Salvador's history. Despite the criticism, many cryptocurrency enthusiasts are following this experiment with hopes of success. If the Bitcoin project proves successful, it could change the future of the economy not only in El Salvador, but also in other countries.