El Salvador Leader Bukele Calm As Media Label ‘Bitcoin Experiment’ a ‘Failure’

The mainstream media in El Salvador has torn into into President Nayib Bukele for his perceived silence over the one-year anniversary of bitcoin (BTC) adoption, with multiple outlets and organizations calling the move a “failure.”

Bitcoin was adopted as legal tender exactly a year ago yesterday, but the anniversary was met with little fanfare by the government – and with BTC prices continuing to slump, media analysts did not pull their punches.

The newspaper El Diario de Hoy quoted economists who criticized the government’s lack of transparency over BTC spending. Thus far, all that Salvadorans know about the state’s spending on BTC holdings and BTC-related investment has been gleaned from Bukele’s Twitter posts on the matter.

One financial expert called the government’s BTC-related activities “an experiment in improvisation and opacity” – noting that spending on BTC had left the country in a “negative financial balance.”

Others claimed that spending on infrastructure for overseas bitcoiners hoping to relocate to El Salvador was also causing financial wrinkles. The economist José Luis Magaña was quoted as stating:

“The bubble of real estate financing in the country has been fed, because throughout the year we have seen a rise in investment in real estate projects linked to bitcoin.”

In a separate report, the same outlet quoted the Central American Institute for Fiscal Studies as stating that the Bukele government’s lack of transparency over its BTC adoption plans was “alarming.”

The body called for El Salvador to reverse its decision to grant BTC legal tender status, explaining that the adoption move had come with “great costs for Salvadoran society and without any tangible benefits.”

Another major media outlet, La Prensa Gráfica, blamed BTC adoption for souring positive relationships with organizations like the International Monetary Fund.

The same outlet quoted Jaime Reusche, a Senior Analyst in Moody’s sovereign risk group, as stating:

“[Adoption] has brought more costs than benefits. In reality, the main cost that we have seen is how it has affected foreign investors’ perception of risk toward El Salvador.”

Foreign media outlets were no less scathing – with Bloomberg writing that Bukele’s “experiment” was a “revolution” that had failed to “pan out as expected.” Reuters stated that the BTC project was “stumbling.”

On Twitter, Bukele retweeted several posts from bitcoiners rushing to his defense. He also shared a post that claimed he would soon author an “op-ed” piece on the matter named “Stop Drinking The Elite’s Kool-Aid.”

Bukele also pointed his followers in the direction of a thread from Paolo Ardoino, the Chief Technology Officer at Bitfinex.

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While some financial reporters have been calling this an experiment, a failed one, they actually fail to recognise the right of a sovereign country in building its own future. A different future for its citizens, built on math money, a currency that can't be inflated.

— Paolo Ardoino 🤖🍐 (@paoloardoino) September 7, 2022

Ardoino wrote:

“El Salvador citizens and government are brave. They know that change won’t happen in a day.”