The decision by El Salvador’s President Nayib Bukele to make Bitcoin legal tender has been widely discussed and debated within the crypto world and beyond. However, recent insights from a TIME Magazine reporter suggest that the move may have been driven more by public relations than by a genuine desire to improve the country’s economic situation. In an interview with Crooked Media’s Pod Save the World, Vera Bergengruen shed light on how Bukele’s push for Bitcoin adoption may have had more to do with enhancing his image on the global stage than delivering real financial benefits for Salvadorans.
Bukele’s past experience as a publicist has come under the spotlight, with his advisers reportedly describing the Bitcoin adoption as a “great rebranding” for the country. Before entering politics, Bukele ran his family’s public relations firm, and it seems this background continues to influence his approach to leadership. According to Bergengruen, the president’s decisions, whether related to Bitcoin or his highly publicised war on gangs, are often guided by an “image first, results later” mentality.
This insight raises questions about the true motivations behind Bukele’s policies. Bergengruen argued that Bitcoin was never really intended to address the economic needs of Salvadorans, but rather to create a talking point that would shift the narrative surrounding the president and his administration. By promoting Bitcoin, Bukele has attracted international attention and set El Salvador apart from other nations. But has it made any difference for the average Salvadoran?
The story of Bitcoin in El Salvador began in 2021 when Bukele first announced his plans to make Bitcoin a legal currency in the country. This announcement sent shockwaves through the crypto industry and made headlines around the world. It was the first time any country had adopted Bitcoin as legal tender, a bold and unprecedented move that positioned Bukele as a trailblazer in the world of cryptocurrency.
However, according to Bergengruen, the announcement came as much of a surprise to Bukele’s team as it did to the public. There were no significant consultations with financial experts or government officials prior to the decision. Instead, it appeared to be a top-down directive from the president himself, forcing his advisers to scramble in order to promote the supposed benefits of Bitcoin for El Salvador.
One of the key arguments presented by the government was that Bitcoin would simplify and reduce the costs of remittances sent back to El Salvador by citizens living abroad. Remittances are a crucial part of the Salvadoran economy, and anything that could make this process more efficient would be a major boost to the country. Yet, according to reports, the rollout of Bitcoin has been chaotic from the start.
Bergengruen described the situation as “chaos from the start”, with the government needing to make it look like the policy would genuinely help the country. In practice, however, the adoption of Bitcoin has not significantly improved the economic situation for most Salvadorans. While the move was portrayed as a way to boost financial inclusion, reduce transaction fees, and bring modern financial technology to a largely unbanked population, the actual benefits have been hard to pinpoint.
Instead, much of the focus has been on tourists and foreign investors. The country’s Bitcoin beach, for example, has become a novelty destination for crypto enthusiasts who are curious to see how Bitcoin functions in a real-world economy. But as Bergengruen pointed out, the benefits seem to be largely for outsiders rather than Salvadorans themselves. It has given Bukele something new and exciting to talk about on the international stage, but the tangible improvements for his own citizens are less clear.
Bukele’s embrace of Bitcoin also came at a time when he was seeking to shift the narrative away from domestic issues. His administration has been marked by controversial policies, particularly his crackdown on gangs, which has drawn both praise and criticism. For Bukele, Bitcoin represented a way to present El Salvador in a new light, one of innovation and progressiveness, even as his internal policies faced scrutiny.
The TIME reporter’s observations align with a broader critique of Bukele’s leadership style, which is often seen as highly centralised and media-focused. His use of social media, for instance, has been a key part of his strategy, allowing him to directly communicate with both Salvadorans and the international community. This has helped him maintain a strong image as a dynamic, young leader who is willing to make bold moves, whether through his Bitcoin policy or his aggressive stance on crime.
But as the dust settles, the question remains: what has Bitcoin actually done for El Salvador? Reports suggest that the majority of Salvadorans still prefer to use the US dollar, which remains the country’s other official currency. The complexities of dealing with Bitcoin, especially the volatility of its price, make it less attractive for everyday use. Many Salvadorans, particularly those in rural areas or with limited access to technology, have found it difficult to navigate the world of digital wallets and cryptocurrencies.
Furthermore, while the government introduced a national Bitcoin wallet known as Chivo, it has been plagued with issues. Many users have reported problems with the app, including technical glitches and concerns about security. There have been reports of fraudulent transactions, and trust in the system remains low among the general population. These challenges have only added to the perception that the Bitcoin experiment was more of a PR stunt than a serious economic policy.
The international crypto community has taken notice of El Salvador’s Bitcoin adoption, with many viewing the country as a test case for how cryptocurrency could function as a national currency. However, the results so far have been mixed at best. While some investors and Bitcoin enthusiasts have praised Bukele’s boldness, others have criticised the move as poorly planned and executed, with little thought given to its impact on the everyday lives of Salvadorans.
Despite the rocky implementation, Bukele has continued to double down on his support for Bitcoin. He regularly promotes the cryptocurrency on his social media accounts and has even announced plans to build a “Bitcoin City” in El Salvador, funded by Bitcoin-backed bonds. Whether these plans will come to fruition, and whether they will bring any real benefits to the country, remains to be seen.
As El Salvador moves forward with its Bitcoin experiment, questions about the true motivations behind the policy will continue to be raised. Was this really about bringing financial inclusion to the country’s unbanked population, or was it, as Bergengruen suggests, more about rebranding and image? For now, the jury is still out on whether Bukele’s Bitcoin gamble will pay off in the long run.
