Crypto Remittances to El Salvador Dropped 18 Percent in Early 2023

Previously, an economist had suggested the president of El Salvador, Nayib Bukele should use cryptocurrency investments to help the country’s poor.

Speaking to a local newspaper, University of El Salvador UCA professor Rafael Lemus said President Nayib Bukele’s Bitcoin purchase yielded no benefit to the country and should be put to better use.

Bukele who became leader of El Salvador in 2019 is conducting Bitcoin legal tender in the small Central American nation in 2021. He has also bought a lot of cryptocurrencies, according to a Twitter announcement.

“Just as he spent more than USD 2 million or the equivalent of IDR 29.8 billion (assuming an exchange rate of IDR 14,940 per US dollar) in Bitcoin, why not cancel that investment, recover what he can, and allocate it to the poorest households,” said the professor, quoted from Decrypt, Saturday (8/4/2023).

He added the move would prevent the country’s poorest households from “moving into extreme poverty” due to inflation.

El Salvador is one of the poorest countries in America. It previously suffered from endemic gang violence but the homicide rate once one of the highest in the world has plummeted under Bukele’s tutelage.

According to data from the website Nayib Tracker, the president has spent more than USD 113 or the equivalent of Rp. 1.2 trillion million on Bitcoin but is currently down 34 percent of the investment. Even though the president is hugely popular in El Salvador and Latin America as a whole, according to polls Bitcoin betting Bukele has been heavily criticized.

The likes of the World Bank and IMF have rejected the idea and so far, not many Salvadorans use cryptocurrency for day-to-day purchases.