Other than pirated currency. Since yesterday the Bitcoin has a valid passport. By the will of Nayib Bukele, a businessman who is the son of a Palestinian imam, elected by popular acclaim to the presidency of El Salvador, a country which since yesterday adopted, alongside the US dollar, Bitcoin as its national currency with a initial exchange rate equal to 0,000020 Bitcoin per dollar which corresponds to a valuation of 50.000 greenbacks for a virtual currency. With virtual currency, in short, today it will be possible to buy anything, as has been the case for some time now at El Zonte, the beach defined as the paradise of surfing which rises about fifty kilometers from the capital, including the pupusas, the local meatballs which represent the staple of street food, so loved by the Yankees. “It's a good way to attract customers“, explains to the Financial Times the itinerant Idalia Meija, promoted to witness the monetary revolution. But, just to cool her enthusiasm, Mrs. Idalia explains: “Every day I convert the proceeds into dollars. I lost too much months ago”.
Yep, Bitcoin is not a coin for weak hearts or wallets: from 10 to 60 thousand dollars in a few months, then back down and up to the current $52. Deviations in the order of 50% within a few months which, for sure, will not be compensated by the stabilization fund of 150 million dollars launched by Parliament.
Also for this reason, the majority of the population says they are against the novelty promoted by the very popular president who, moreover, trusts that Bitcoin can represent a big deal for El Salvador, an economy that depends above all on remittances from emigrants, or 6 billion dollars – equal to 23% of GDP – which arrive from the States every year. But that, Bukele says, translates into $400 million in taxes and fees, one annuity for the benefit of banks and financial institutions north of the Rio Grande. Without forgetting that, given the plans of the Biden administration, a season of weakening of the dollar is looming, largely financed by Central American carers.
And an industrial aspect is not missing: the ingenious Bukele promoted the birth of The Geo, a company that will have to promote the production of Bitcoin in the bowels of the country's lands, rich in geothermal energy that gushes from volcanoes, thus removing one of the great obstacles to the success of the cryptocurrency which already today consumes the equivalent of C02 released by nine million cars.
But these arguments do not convince financial institutions all that much. El Salvador, given the protection afforded by the law, risks becoming something of a Tortuga for buccaneers hunting for a port to launder ill-gotten gains. "It is easy to foresee - wrote Fitch - that the country will act as a magnet for gains of dubious origin".
Moody's went further, cutting the country's rating, which made it more difficult for the IMF to grant a 1,3 billion dollar loan, kept in the dark by Bukele.
In short, it is about a big gamble: How will a population react which, 70%, does not have a current account in front of a virtual currency, without the control of a central bank or a political authority? “Nobody knows right now,” admits the Wall Street Journal.
And the authorities tremble in the face of financial creativity which could be unleashed thanks to the diplomatic bag (albeit only virtual) granted by Bukele or his imitators. In fact, Cuba too could soon open its doors to cryptocurrency en route to the sea that once belonged to the corsairs.
