El Salvador Perspectives

The price of Bitcoin this morning was around $67,250, down 45% from its high above $120,000 in October.   This represented a decline of roughly $300 million in the value of the country's Bitcoin reserves in just four months.  In an article titled  Fall in bitcoin puts pressure on El Salvador's debt and complicates the relationship with the IMF , Bloomberg suggests that this fall in value of the volatile crypto-currency and the corresponding decline in El Salvador's reserves may be causing international investors to question the country's finances.  When the Bukele government finally reached agreement with the IMF on the terms of the $1.4 billion loan facility in December 2024, the IMF required El Salvador to undo the law which made Bitcoin legal tender in the country, and to sell off the government's Bitcoin wallet "Chivo."  The country promised not to increase its exposure to Bitcoin risks.   In a  staff statement  on December 22, 2025...

Measures the Legislative Assembly passed for Nayib Bukele On January 29, El Salvador's Legislative Assembly gave the second vote to adopt  a constitutional amendment to allow the Constitution to be amended in the future by a single supermajority vote by the legislature.  Up until now, amendments had to be approved by two successive legislatures with a national election in between. That requirement gave the public the chance to vote out of office legislators who supported an amendment before they had a chance to give it final approval in the next term.  Since Bukele's Nuevas Ideas party today possesses such a supermajority in the congress, he can now amend the Constitution anytime he wants by submitting it to a single vote in his rubber stamp legislature. For example, those pesky provisions that limit how long a president can serve in office, can be eliminated with a quick vote and no debate. The constitutional amendment passed with no prior announcement that it would be o...

A recent surge in the price of Bitcoin has increased the value of El Salvador's Bitcoin reserves and led president Nayib Bukele to say "I told you so."  The value of the country's  declared Bitcoin reserves is around $575 million.   At the same time, to obtain a loan from the International Monetary Fund (IMF), Bukele is being required to dismantle key parts of his Bitcoin law and cut back on government spending. The price of Bitcoin increased 50% after the election of Donald Trump to all-time highs above $100,000 US.  Since Bitcoin hit $100,00 on December 4, Nayib Bukele has been regularly patting himself on the back on social media:   Despite the surge in the value of Bitcoin as an investment asset held by El Salvador in its reserves. the digital asset never caught on as the form for ordinary daily cash transactions in El Salvador.  One of the major skeptics of the designation of Bitcoin as legal tender in El Salvador, and Bukele's large investm...

A recent run-up of the price of Bitcoin has Nayib Bukele and all his supporters wanting to say "I told you so."  The price of Bitcoin today is $65,335USD, up 26% from September 6, 2021 when El Salvador's Bitcoin law went into effect.   In between those dates, however, the price had dropped below $17,000 in December 2022, increasing the skepticism around Bukele's Bitcoin gambit.     Bitcoin price history since El Salvador Bitcoin law went into effect As the volatile price of Bitcoin started surging again beginning in November 2023, Bukele repetitively posted that he was " still waiting " for the critics of his Bitcoin strategy to admit they were wrong.  Skeptics, myself included , wanted to see the actual financial records and evidence of income and expenses for the Bitcoin project. On March 14, 2024, Bukele went on X.com to post a screen shot showing 5690 BTC worth $406 million USD that day, being received at specific address on the blockchain. Bukele ...

The year 2023 saw increasing arrivals in El Salvador of persons declaring they had arrived in a promised land of freedom.  They are persons from English-speaking countries arriving in El Salvador to escape.  Whether you call them “influencers” or “youtubers” or Bitcoiners”, they go on social media to announce that they have left countries where they felt oppressed by their governments, and only by escaping to El Salvador did they find freedom.  It's a freedom of the rich colonialist, not a freedom guaranteed by the government of El Salvador to all its citizens.     Typical of these exaggerated proclamations that El Salvador is a beacon of freedom is this  article in Bitcoin Magazine  by William Stebbins, a retired US military officer who declares that El Salvador has transformed itself under Bukele "from impoverished vassal to budding sanctuary of freedom."  Stebbins proclaims "Bitcoin’s freedom technology has offered Salvadoreños an opportun...

September 7 is the second anniversary of Bitcoin becoming legal tender in El Salvador along with the US dollar.  This past year has seen Bitcoin fade from relevance for the vast majority of Salvadorans, and has seen the Salvadoran government cease to promote its use as a currency for daily transactions.       President Nayib Bukele has not tweeted or posted anything in Spanish about Bitcoin in the past year.  He did not mention Bitcoin in speeches to the nation last independence day, September 15, or in his state of the nation report on the fourth year of his presidency. There is no promotion of the use of Bitcoin as a currency coming out through the social media arm of the office of the president. You will look in vain on the website of the Central Reserve Bank of El Salvador for any reports related to Bitcoin, despite the cyber-currency being legal tender in the country along with the US dollar.  You will also not find recent discussions, promotion ...

Here are a collection of bits and pieces from the news in El Salvador during the past month when we were on break.  1.  Cargo ferry service begins. Commercial cargo ferry service arrived between Costa Rica and El Salvador on Thursday, August 10.  The Blue Wave Harmony ferry is able to carry 100 tractor trailer trucks for the 430 mile voyage through the Pacific from one country to the other in less than 24 hours.  There will be two trips per week.   The first trip was not without problems, needing almost 28 hours to complete the journey and being unable to unload trucks on arrival in Costa Rica when it was low tide. The business case for the ferry rests in being able to ship good between the two countries while bypassing border crossings with Honduras and Nicaragua.  Commerce with Nicaragua under the dictatorial Ortega government has become increasingly subject to uncertainty. 2.   A crypto safe haven. El Salvador is becoming a haven for cry...

  The year 2022 was not the golden year for a Salvadoran Bitcoin economy which El Salvador's president Nayib Bukele had hoped for, but he still includes himself among the crowd of Bitcoin true believers. At the beginning of 2022,  Bukele confidently tweeted out his predictions on Bitcoin for the next 12 months:  Bukele missed on every one of those predictions, as Sergio Goschenko writes in  this article  at Bitcoin.com.  Two major trends in 2022 impacted Bukele's Bitcoin gambit for El Salvador -- the collapse in the price of Bitcoin with other crypto-currencies and the refusal of ordinary Salvadorans to adopt Bitcoin in everyday use.   At the end of 2022, the Salvadoran government established a " National Bitcoin Office " whose role is described as overseeing the country's domestic Bitcoin projects.   So far, that office seems to primarily be another public relations arm of the government, aggressively cheerleading for the country a...

Despite the small size of El Salvador, president Nayib Bukele manages to be a regular subject of international press attention.  Perhaps most prominently, Bukele appeared November 1 on the streaming program of right-wing US television host Tucker Carlson. During their hour long English language conversation, Carlson praised Bukele for his wisdom while Bukele offered up his opinions on global macroeconomics, adoption of Bitcoin, and how the international media and economic press is "Fake news" and propaganda.  Bukele then had Spanish subtitles added to the show and made it available on his official Twitter feed for Salvadorans.  (Here is the full  Bukele interview with Tucker Carlson ). A look at the recent international economic press shows why Bukele has no fondness for it: El Salvador’s $300 Million Bitcoin ‘Revolution’ Is Failing Miserably  (Bloomberg, Nov. 4, 2022) -- "President Nayib Bukele tied his country’s fortunes to the digital token, but there isn’t m...

September 7 marks one year since Bitcoin became legal tender in El Salvador alongside the US dollar.  Today we look back at the first year of president Nayib Bukele’s crypto gambit.  It has been a year in  which the crypto-currency made few inroads into the daily transactions of the Salvadoran economy, the collapse of the price of Bitcoin left the government holding coins worth much less than when Bukele bought them, and a much-hyped "Bitcoin Volcano bond" to fund "Bitcoin City" is still nowhere to be seen.      Bukele originally announced his plans to make Bitcoin the country’s currency at a Miami Bitcoin conference in June 2021, to the surprise of his nation and many others.  Within days, and with little debate or analysis by the Legislative Assembly, a 3 page law was passed to fulfill his announcement.  The law made Bitcoin legal tender and required every merchant in the economy to accept Bitcoin in payment if the merchant had the technical ca...

Reading recent articles about current events in El Salvador, I was struck by how many include religion as a theme.  Remarks by the Archbishop of San Salvador, Archbishop José Luis Escobar Alas, recently caught the attention of the Associated Press, generating the headline  Salvadoran Archbishop praises government crackdown on gangs . The archbishop said in a press conference “People don't want the violence to return,.... They not only want these things maintained, they want them to advance, to end the violence" and the prelate urged the president to avoid "margins of error."      In making those remarks, the archbishop may have turned a blind eye to just how gross those "margins of error" have been producing thousands of complaints of arbitrary detentions.  In a report today titled  State of Exception Files: Hundreds Arrested for Prior Convictions or “Looking Nervous”  reporters from El Faro described their conclusions after obtaining hundreds of...

After  few weeks away from regular posts on El Salvador Perspectives, here is an update on the news out of El Salvador. Intense rains cause localized flooding Flooding  rains  passed through El Salvador this weekend as Hurricane Bonnie passed off the Pacific coast. At least  two people were killed  and 90 left in shelters, with school classes suspended nationwide on Monday. Videos circulated on social media of water flooding public hospitals including the country’s largest public hospital, Rosales. Although the government has had the funds on hand to replace or modernize Rosales since the beginning of the Bukele administration in 2019, no work has commenced on that project.   Sinkholes appeared in streets throughout the metropolitan area of San Salvador illustrating the ongoing infrastructure needs and the impact of urban development which has paid little attention to risk management.    The State of Exception continues The State of Exceptio...