When El Salvador announced a few weeks ago that it wanted to make Bitcoin legal tender in the country, it received a lot of criticism.
An imprudent move, a desire to dazzle the desperate citizens with effective maneuvers. But these were the most tender criticisms. In fact, many citizens have literally rebelled against President Nayib Bukele, saying that Bitcoins were used only to launder his dirty money and that of his elite of friends. The issue was sensational because as soon as El Salvador made Bitcoin legal and bought a lot of it, the price of Bitcoin strangely plummeted. So much so that the Salvadoran president from Twitter said that it was a maneuver by the International Monetary Fund against his country. Whatever it is, today El Salvador is celebrating because i Bitcoins purchased also, among other things, taking advantage of the momentary price drop, have currently grown in value by as much as 40%.
A move that is rewarding for now
Those in the country who were in favor of the operation are now celebrating victory and this could certainly be an incentive for other countries in difficulty to attempt a similar maneuver. However, with cryptocurrencies you have to be careful because they have really strong fluctuation rates that do not reconcile with the needs of a state. Certainly the El Salvador experiment will appeal to many and it is no mystery that Brazil is already thinking of doing the same. We will see if time will actually reward this kind of operation.
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When electoral consensus dynamics mix with crypto dynamics, the mix can be dangerous. The easy consensus that comes from winning with Bitcoin does not mean that the volatility of these currencies must be carefully evaluated.
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However, the temptation for other presidents to do something similar and pass for saviors of the homeland will be considerable.