El Salvador’s president is keen on ‘Bitcoin City’, but residents say the plan isn’t working
The crypto winter has hit El Salvador – a country that bets its economy on Bitcoin, the world’s largest cryptocurrency – but residents of the country believe that the “Bitcoin City” plan “doesn’t work anymore”.
El Salvador is the first country to recognize Bitcoin as legal tender and plans to build an entire city based on the largest cryptocurrency Bitcoin. President Nayib Bukele of El Salvador is relying on Bitcoin to stimulate the country’s economic growth and investment.
“Most Salvadorans do not use Bitcoin for day-to-day transactions, so there has been no impact on family finances whatsoever. Using Bitcoin as a currency does not give Salvadorans an advantage over cash or digital money (debit/credit cards), besides getting The $30 bonus,” Diego Jozue, a resident of Sal Salvador, the capital of El Salvador, told indianexpress.com.
The belief that every store in El Salvador accepts Bitcoin does not hold any truth. Medium and large businesses still accept Bitcoin as payment since it’s legal, but “small and informal businesses don’t accept it, not because they’re against it, it’s just that nobody uses it,” he said.
Bukele in November 2021 also unveiled a $1 billion “Bitcoin bond” – half of which ($500 million) will be used to build energy and mining infrastructure, and the rest ($500 million) will be used by the country to buy more Bitcoins. The issuance of these bonds will be managed by Blockstream, a Bitcoin service-focused company. The tokenized bond will be available to more users in the world who will have access to invest in small amounts as low as $100 dollars. Dividends will be easily paid to bondholders using tools deployed on top of the Liquid network.
However, residents are not aware of these bonds. “The bonds are postponed and we have not received any information about this,” Jozue added. Indianexpress.com contacted several other residents who also categorically denied knowledge of Bitcoin bonds.
El Salvador residents are also reporting that their Bitcoin has disappeared from the government-introduced Chivo wallets. Chivo is a citizen crypto wallet to facilitate Bitcoin transactions. Over the past few months, major banks and merchants in the country have increased acceptance and credit functionality by leveraging the Chivo wallet.
Jozue said his father downloaded the Chivo app and he taught him how to use it. He added $80 to his wallet. “One day my dad told me he couldn’t access his wallet and that’s when I found out his account was suspended. I called the customer support channel who informed me that my father needs to personally go to a Chivo point (the booth where the ATM is) and get help from one of the people there.” But till date the account is suspended.
“Whether my father gets his money back or not, he will not use BTC again,” he said.
Another Salvadoran, who wished to remain anonymous, also said that the biggest failure was the Chivo wallet, since it was launched with many errors, and some people running their own businesses who tried to use it as a payment method could not receive money or lost. “There were some days where the app wouldn’t load and you had to clear your Android cache every time you wanted to open it for it to work. Also, there was poor communication/education on how to use this technology,” they pointed out.
