The President Explains His Reasons Behind Bitcoin

Nayib Bukele on El Salvador ’s New Legal Tender

“To be less dependent on the output of new dollars and the inflation which comes with that…the problem with using an international currency that is not yours to print is that you’re only absorbing the cost. Now your dollars are worth less. But you’re not getting any of the new printed dollars because they didn’t print them for you.” Hearing directly from President Bukele, himself, for the first time since he announced Bitcoin would become legal tender in El Salvador allows us to see a side of the argument that mainstream media are, for the most part, not showing us. As usual with Bitcoin there has been a very binary response to the story. Some think it’s very good and some think it’s very bad, not much in between. Clearly Bukele thinks his country has a lot to gain, but there are many incumbents of power and wealth who are not happy.

There has been a recent move by the International Monetary Fund (IMF) to prevent El Salvador’s banks’ ability to use bitcoin on the foreign exchange market. A World Bank spokesperson told Reuters, “while the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”

Not surprising. Citing environmental concerns seems to satisfy most people given the current backlash to Bitcoin in the media. Bitcoin is open source and transactions — although pseudonymous rather than anonymous — are there for all to see, so it would be useful to know what transparency shortcoming the IMF are referring to.

Perhaps more to the point, if any bitcoin transactions took place on the foreign exchange it would indicate another country had been willing to take it. That might start a domino effect and destabilise the dollar. The IMF would not want that. After many opinion pieces and soundbites, a direct interview with President Bukele on the What Bitcoin Did podcast was released. Below is a 11 minute clip from that interview. It was a chance to hear more than just hearsay on his move to bitcoin, and he laid bare the advantages bitcoin has for his country over the current financial system. It was also interesting hearing him discuss plans for the natural geothermal energy in El Salvador.

President Bukele on the What Bitcoin Did podcast, June 2021.

Cryptocurrency writer — technical, philosophical, op-ed. He occasionally does press for selected projects. therobertmccracken@gmail.com