This Economist Says That Says El Salvador’s Year With Bitcoin Has Failed Spectacularly

The vision of El Salvador’s President, Nayib Bukele, to proportionate bitcoin with the country’s currency seems to be a “spectacular failure”, according to Canberra University Economist, John Hawkins. El Salvador called himself the “world’s coolest dictator” and has also been renowned as “CryptoBro” after his attempt to make Bitcoin an official state currency. He was deeply involved in implementing Bitcoin as a state currency around a year ago, but the details coming out recently are not so encouraging. As outlandish as the tale may seem, this grand crypto experiment is certainly not going to happen.

Graphic courtesy: NBER

Hawkins wrote in The Conversation, “Now, a year on, there’s more than enough evidence to conclude Bukele had no idea what he was doing.” Bukele announced an ambitious goal a year ago to construct a “Bitcoin City” and for this venture, he planned to receive funding of around $1 billion through the government bond program. For this, he projected that half of the amount will be invested into the construction of the city, however, the remaining amount would be covered by the Bitcoin investments. Bukele was of the opinion that the investments in Bitcoin would pave way for the economic growth of the country and would open the doors to lots of opportunities as well.

As per the reports, all of this has yet to be done now. However, Bukele has already invested around $100 million dollars into Bitcoin which makes up half of that amount according to today’s worth. As far as the bond program has been concerned, Bukele has yet to nail down an implementation plan for this as well. Bukele wanted a faster action plan but as already noted, the incidents of gang violence have deviated the nation towards “confused economic turmoil”. Hawkins further said, “Bukele’s misunderstanding of Bitcoin — and economics more generally — has been demonstrated repeatedly.”

Side by side, Bukele has also failed to attract the nation through his solid efforts on this cause and this is also one of the big factors which made the nation take this matter lightly. Along with this, officials at the International Monetary Fund (IMF) have also requested Bukele to decorticate his “crypto-forward legislation” because they think that Bitcoin is still unstable and fluctuating to be used for the country’s economy.

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