El Salvador has received mostly praise and support from the Bitcoin community after accepting the popular cryptocurrency as legal tender. However, Ethereum co-founder Vitalik Buterin has now come out with criticism of the coin’s forced adoption.
Shots fired by Buterin
In a Reddit comment called “Unpopular opinion: El Salvador President Mr Nayab Bukele should not be praised by Crypto community,” Buterin criticises what he sees as a less than laudable way to introduce crypto to more people. He laments that Bukele’s actions were the exact opposite of “power to the people” and quotes examples such as Bukele writing “Dictator” in his Twitter bio, him storming the legislative assembly with armed troops, and replacing Supreme Court judges with loyalists. In Buterin’s opinion, if the adoption of Bitcoin in El Salvador were to fail, and if Bukele were to turn out as a dictator, after all, that would again leave a stain on the reputation of cryptocurrencies. Quite possibly, crypto would be again seen as used only in illegal business.
Is Bitcoin voluntary in El Salvador?
While Bitcoin maximalists might wave Buterin’s comments off as jealousy or irrational FUD, the truth is that Bukele has backtracked on quite a few of his earlier statements concerning the adoption of bitcoin. In July, after having received pushback against the mandatory use of the currency, Bukele stated that bitcoin would be “totally optional” and that the government would not force it onto its citizens. But that contradicts how the law is being executed now, with merchants having to accept bitcoin since it is legal tender after all. “One thing is what the president says, and another is what the law establishes,” said one Salvadoran merchant.
To that, Buterin added that the “tactic of pushing BTC to millions of people in El Salvador at the same time with almost no attempt at prior education is reckless, and risks a large number of innocent people getting hacked or scammed. Shame on everyone (ok, fine, I’ll call out the main people responsible: shame on Bitcoin maximalists) who are uncritically praising him.”
How well is the adoption really working?
How well the adoption of bitcoin in the Latin American country is progressing depends on who you ask. According to Bukele himself, it’s going fantastic since over 2.5 million Salvadorans have already used the government’s Chivo wallet, and over 50% of the people have used bitcoin.
But look a bit closer, and things start looking less rosy. Recently, lines appeared in front of Bitcoin ATMs, showing people that were quite possibly cashing out their $30 worth of bitcoin, a considerable sum in a country as poor as El Salvador. Chivo has also been facing performance issues with repeated malfunctions tripping up wider adoption of the wallet. Add to that Bitcoin’s famous volatility, and you get a less-than-favorable mix for a country that literally cannot afford economic experiments. With new all-time highs on the horizon, El Salvador might get more time to iron out rollout problems, but it will have to make it count or face the wrath of its citizens.
