Nayib Bukele, the president of El Salvador, called out the U.S. Federal Reserve for its constant printing of money on December 1, 2021.
He tweeted, “Can you guys just stop printing more money? You’re just going to make things worse. Really. It’s a no brainer.”
Can you guys just stop printing more money?
You’re just going to make things worse.
Really. It’s a no brainer. https://t.co/reVH1irzOt
— Nayib Bukele 🇸🇻 (@nayibbukele) November 30, 2021
Bukele was responding via quote tweet to a post on Twitter revealing U.S. Fed Chair Jerome Powell’s desire to “retire” using the word transitory to describe inflation.
— Bloomberg (@business) November 30, 2021
Bukele is an interesting figure. 2021 was the year he entered the international stage by speaking at the Bitcoin 2021 conference professing his support for Bitcoin. Bukele later signed into law a bill that adopted Bitcoin as legal tender. The law allows for citizens to pay taxes in Bitcoin, obligates all businesses to accept Bitcoin, and lays the groundwork for the government to distribute subsidies in it.
The law went into effect on September 7. So far, the Salvadoran government set up a network of 200 Bitcoin ATMs and a digital Bitcoin wallet app, called Chivo. Through the usage of this wallet, the Salvadoran government has been able to give $30 worth of Bitcoin to every Salvadoran citizen in an attempt to boost the Bitcoin economy.
According to Bukele, 2.1 million Salvadorans have used Chivo thus far. In essence, a third of Salvadorans (El Salvador is a country of 6 million people), have allegedly used the Chivo wallet.
Although not ideal from a free market perspective, El Salvador has opened up the conversation for cryptocurrency adoption in a way that no other Latin American country has done thus far. According to the Heritage Foundation’s Index of Economic Freedom, El Salvador is ranked in a sub-par 94th place, largely due to its lack of property rights and bad climate for doing business in. So any form of policies that attract more economic activity will go a long way in getting the country off of its feet.
In addition, El Salvador’s Bitcoin adoption could compel other Central American countries such as Costa Rica and Panama, both known for having relatively free markets, to step their game up and potentially one-up El Salvador when it comes to Bitcoin adoption.The U.S. would be best served by some Bitcoin competition as well, given how it’s beginning to dabble with inflation and has done nothing of substance to contain its profligate spending.
That’s the beauty of jurisdictional competition. Hopefully, Bitcoin forces countries to adopt less predatory policies and instead, incentivize them to promote policies and institutional arrangements that make them desirable places to live in.