As joyful as that vaxxed-up post-COVID reunion has been, I sure wish it hadn’t overlapped with the most significant single development in the history of cryptocurrency so far: the adoption of bitcoin as legal tender in El Salvador.
Another major question is whether Salvadoran President Nayib Bukele, who is wildly popular but has made authoritarian moves to consolidate power, is the ideal leader to take this dizzying first step.
But those details pale in comparison to the broad outlines: For the first time, a nation has adopted a currency that neither it nor any other single entity controls.
I don’t like it because it’s another currency competing against the dollar … I want the dollar to be the currency of the world.
The use of the dollar as a global medium of exchange and savings provides huge benefits to the U.S., and losing that dominance, whether to bitcoin or the yuan, would have major negative impacts on the U.S.
The International Monetary Fund chimed in Thursday morning, saying El Salvador’s plan raises “a number of macroeconomic, financial and legal issues that require very careful analysis.” This may sound anodyne enough, but when you recognize that the IMF is effectively a tool of economic coercion used by rich northern nations to bully developing countries in the global south, it takes on an ominous tone.
Salvadorans nonetheless apparently adore their president, who has a steady approval rating near 90%, likely because they understand his actions in the context of El Salvador’s messy and bleak political history.
Though founded with high ideals, since the 1970s the IMF has used these loans as a coercive tool to advance first-world interests as part of a neoliberal strategy that Naomi Klein termed “The Shock Doctrine.” The IMF has consistently tied its emergency loans to drastic economic “reforms” that usually amount to brutal austerity for working people and free rein for international corporations.
In exchange for that truly insulting pittance, the IMF demanded “modernization” policies that included privatizing public assets, stripping worker protections and cutting public spending by 6% over three years.
The same rapacious policies have been deployed, usually in a cookie-cutter fashion with little flexibility based on local conditions, in dozens of developing countries.
In the most notorious example, it’s widely believed IMF bailout packages badly worsened the 1997 Asian financial crisis, because the agreements made it impossible for nations to stem short-term capital flight.
You can begin to see why the IMF might regard a developing nation’s adoption of an independent currency system as deserving of “very careful analysis,” as a spokesperson put it.
And, good heavens, let’s hope no developing nations so much as think about decentralized finance the next time they need a loan – that would just be awful.
The question of Bukele’s authoritarianism is much less clear-cut.
Bukele began his political career as a member of the Farabundo Marti National Liberation Front, a party that grew out of a leftist guerrilla movement after the 1992 end of the country’s 12-year civil war.
And here, prepare to be shocked, shocked: The Salvadoran regime’s campaign of terroristic repression was supported by $1 million to $2 million in aid per day from the United States of America.
has used innumerable brutal, cruel and devious tactics to interfere with and depose democratically-elected left-wing politicians – especially, it seems, those most beloved by their citizens.
The U.S., and particularly the Central Intelligence Agency, are known to have actively participated in the 2019 coup against Evo Morales, the democratically elected and hugely popular leftist leader of Bolivia.
Even more egregious is recent reporting indicating that the CIA was an active player in the so-called “Lavo Jato” operation in Brazil.
Lavo Jato led directly to the empowerment of Jair Bolsonaro, a far-right ideologue who it does not seem unfair to describe as completely unhinged.
has violently intervened in the domestic politics of Latin American countries at least 14 times since the beginning of the 20th century, according to a tally by the Associated Press.
While death squads never go out of fashion, the increasing internationalization of banking and finance has added a subtler weapon to the imperialist arsenal.
Bukele is not emphasizing this angle – and if you were in his shoes, would you? But you can bet it’s very much on his mind.
If it works to even a limited degree, they have every incentive to follow suit.
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