El Salvador: Opposition Protests Bitcoin Becoming Legal Tender

A Chivo Wallet Bitcoin ATM burns during a protest against President Nayib Bukele's policies on Independence Day in San Salvador, on September 15, 2021. - Thousands of Salvadorans demonstrated on Wednesday to demand that President Nayib Bukele respect the separation of powers and reject the introduction of bitcoin as legal …
MARVIN RECINOS/AFP via Getty Images

Thousands of people opposed to the populist government of El Salvador President Nayib Bukele staged demonstrations in the country’s capital city, San Salvador, on Sunday in which they denounced his recent legalization of Bitcoin as a national currency, the Associated Press (AP) reported Monday.

Demonstrators from the left and far-left of the political spectrum, “including feminist groups, human rights organizations, environmentalists and members of political parties, shouted slogans and carried signs reading, ‘Bitcoin is fraud,'” according to the AP.

President Bukele is the leader of a center to center-right political party in El Salvador known as “New Ideas” in English. Bukele founded New Ideas, also described as a populist party, in 2017. Since his election to the country’s presidency in 2019, Bukele has enacted a number of reforms. Most recently, Bukele adopted the cryptocurrency Bitcoin as a legal tender in El Salvador on September 7, making his country the first in the world to do so.

El Salvador established Bitcoin as a legal tender with the primary hope of retaining an estimated $400 million in financial fees lost during remittance transactions each year. Remittances, or money sent home to El Salvador by citizens living abroad, constitute roughly 23 percent of El Salvador’s GDP.

The country, which has used the U.S. dollar as its official currency since 2001, estimates that more than 2.5 million Salvadorans live abroad, mostly in the U.S. Salvadorans living and working in the U.S. sent nearly $6 billion home to El Salvador in 2020, largely through traditional wire transfers.

“Our people pay $400 million a year in commissions for remittances,” President Bukele wrote on Twitter in August. “That saving alone will be a huge benefit for our people (or at least for those who want it).”

Bukele previously said any Salvadoran can use Bitcoin as legal tender by downloading a government digital wallet onto his or her personal smartphone. The application, named “CHIVO,” or “good” in colloquial Spanish, will allow citizens to “accept payments in bitcoin or dollars. Having installed the app on their phones, they will be able to withdraw dollars from government-backed cash machines,” Reuters reported in September.

President Bukele on October 17 tweeted video footage of the demonstrations against his government’s recent reforms in San Salvador.

“Protesters beat a citizen for exercising the RIGHTS that they SAY they defend,” Bukele wrote in an accompanying statement.

The citizen is seen in the video being harassed by several leftist protesters, some of whom knock his phone out of his hand as he tries to document his assault. The man appeals to a representative of El Salvador’s Human Rights Ombudsman, who stands nearby wearing a conspicuous blue vest. The representative “takes the side of the aggressors,” the president pointed out.

“This is what the international community supports,” Bukele concluded, referring to a consensus by most foreign governments and establishment media to denounce his administration’s reforms, despite their overwhelming domestic popularity.

“Polling suggests that Bukele, 40, is the most popular president in Latin America,” Reuters acknowledged on September 6.

“Bukele’s approval rating is one of the highest that any Salvadoran president has ever had,” ElSalvadorInfo.net reported on October 2.

Bukele’s approval rating has always charted at 75 percent or higher since he was elected president in a landslide victory in June 2019 according to the news site, which cited recent polls by “CID Gallup, Mitofsky, Francisco Gavidia University, La Prensa Grafica, and others.”

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