Foreign Policy: El Salvador Is Printing Money With Bitcoin

Yet more El Salvador! This one is hardly about Bitcoin at all — it’s about the politics of what I think Nayim Bukele was thinking. [Foreign Policy]

My thesis here is that Bukele doesn’t want to de-dollarize El Salvador — he just wants to print his own dollars as well. So he wants to inject bitcoins and tethers, account those as “dollars,” sop up all the actual dollars to pay outside debts, and hope the Salvadoran economy takes off before it all goes Argentina in 2001 and people start setting fire to things.

 

 

This one was 24 hours from James Palmer messaging me for a piece, to publication. Of course, it was also eight days of being steeped in El Salvador’s new Bitcoin Law, and how the local Salvadorans feel about it.

Tremendous thanks to my pre-readers — particularly the local Salvadorans, an Ecuadorian economist who watches El Salvador closely, and Ed Salazar, who’s from Argentina.

Update: Seph Brand has done an unofficial translation into Spanish, which I’m told is accurate. [Seph Brand]

 

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4 Comments on “Foreign Policy: El Salvador Is Printing Money With Bitcoin”

  1. “assuming they can pry the dollars loose from Strike.”

    I’m presuming Strike and Bukele have already stitched up a deal here. I doubt very much the details of who has dibs over these inbound USDs is up in the air.

    1. I’m sure both parties are immaculately reliable, competent and trustworthy dealmakers with excellent track records.

      1. As I understand it, the whole deal is offensive to anyone with even basic financial literacy. Strike, or their nominees take custody of this inbound USD, and therefore get to invest it and earn interest at the overnight rate, while the luckless El Salvadoran recipient of the remittance gets magic USDs (USDT) which do not earn interest. That interest on all remittances will add up to a tidy sum, great deal for Strike. Then our hoody wearing friend at Strike has the gall to tell El Salvadorans the remittance transfer is “free”.

        1. Well hooded friend said he would be using lightning. Which apparently would transfer in seconds the btc or even tethers although he later restated tether’s out of the picture… Possibly due to its bad rep (lack of usd reserves). I think he will get coms from moving in out of coins or add a levy on lightning fees. He has the nerve to state in website strike charges nothing…

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