Blame Government, Not Bitcoin, for El Salvador’s Crypto Troubles

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The Laser Eyes that have become a signature MEME of crypto enthusiasts are gone from El Salvador President Nayib Bukele’s Twitter profile—a likely acknowledgement of Bitcoin’s recent price slump. The image-conscious leader is wrestling with his country’s massive Bitcoin investment as he tweets about Bitcoin’s future value, hosts global conferences on cryptocurrency, and tries to stave off the International Monetary Fund’s entreaties against his pro-Bitcoin stances.

But he should also take a hard look at his own government’s increasingly authoritarian monetary policy as the root cause of his problems, not the volatile digital asset’s recent price slump. His best move would be to open the country’s monetary policy completely to all crypto and allow competition to thrive. 

Mr. Bukele’s Bitcoin foray placed him on the crypto map when El Salvador declared Bitcoin legal tender last summer, along with grand promises of modernizing the economy, decreasing dependence on the U.S. dollar, and lowering transaction fees from the U.S.-based relatives. The promises invited a clash between a government controlling citizens’ monetary future and Bitcoin’s decentralized, individual-empowered ethos.

The biggest rift concerns Chivo, the digital wallet Salvadorians are strongly incentivized to use. Although privately designed, a state-owned company controls the wallet and users’ private access keys. It is also funded by a public trust.

Read the full article on RealClear Markets.