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El Salvador’s Bitcoin Purchases Raise Question Among Citizens

By:
Oluwapelumi Adejumo
Updated: Dec 10, 2021, 20:55 GMT+00:00

Questions are beginning to emerge on El Salvador’s management of its Bitcoin purchases.

El Salvador’s Bitcoin Purchases Raise Question Among Citizens

El Salvador’s Bitcoin decision has won it an equal number of friends and foes around the world. While the crypto community has continued to hail the adoption of the country, the Bukele-led administration has faced some level of backlash from some of its citizens who have accused the government of bad governance and being corrupt.

El Salvador’s BTC Purchase Lacks Transparency

A recent report from a local media house in El Salvador has revealed that the Salvadoran government has not been totally transparent in its dealing with the flagship digital asset. According to the report, the government has been making various Bitcoin purchases without providing any information on where the fund is coming from.

The media outlet estimated that El Salvador has spent over $160 million on Bitcoin purchases, however, there is little to no information on where the coin is being stored or knowledge of those who have access to it.

Bitcoin City is a Risky Project

The report described El Salvador’s proposed Bitcoin city project as a “risky” and “desperate measure” being implemented by the government.

According to economist Ricardo Castaneda, “If [the BTC bonds and Bitcoin City projects] go well, President Bukele will be an example and will be able to tell multilateral organizations and the international community that we don’t need them. But if this goes wrong, the whole population is going to lose out.”

The economist considered that the Bitcoin City announcement “is like selling an illusion for bitcoiners and that with that they have an incentive.”

Bukele Remains Bullish About Bitcoin

Despite the concerns raised by different international organizations and locals of the country, President Nayib Bukele has maintained a bullish sentiment towards the flagship digital asset as he pushed for the adoption of the coin in the country.

We’re already in the green from our last purchase, in less than 24 hours.

You know boomer, we have 44,106 oz of gold in our reserves.

Worth $79 million, down 0.37% from a year ago.

If we had sold it a year ago and bought #Bitcoin, it would now be valued at $204 million. https://t.co/e5z9cVsfjg

— Nayib Bukele 🇸🇻 (@nayibbukele) December 4, 2021

Since he revealed his intention to legalize BTC in the Central American country, the government has introduced a number of pro-crypto policies like incentivizing the use of the Chivo wallet, airdropping $30 worth of BTC to citizens while also revealing some statistics that show a positive sentiment of the citizens towards the asset.

However, a study by the Center for Citizen Studies at Francisco Gavidia University has negated some of his claims. The research result shows that 91% of the country’s citizens prefer the US dollar to the digital asset. Per the research, 40% of the citizens still oppose the country’s adoption of the asset as a legal tender.

About the Author

Oluwapelumi is a firm believer in the transformative power power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas about how the industry could play a pivotal role in the emerging financial system. When he is not writing, he is looking to meet new people and trying out new things.

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