Source: AFP
Napoleon Osorio is proud to be the first taxi driver to accept bitcoin payment in the first country in the world to legalize cryptocurrency: El Salvador.
He credits President Nayib Bukele’s decision to capitalize on bitcoin three years ago with changing his life.
“Before I was unemployed… and now I have my own business,” said the 39-year-old entrepreneur, who uses an app to charge for rides in bitcoin and now owns his own car rental company.
Three years ago, the leader of the Central American nation took a huge gamble when he put bitcoin into legal circulation in an effort to revive El Salvador’s dollarized, remittance-dependent economy.
It has invested hundreds of millions of dollars of taxpayers’ money in the cryptocurrency, despite warnings of volatility risks from global institutions.
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Source: AFP
Osorio credits American NGO My First Bitcoin founder John Dennehy with encouraging him to accept payment in the cryptocurrency.
He now has 21 drivers working for his Bit-Driver brand and has enough profit from the currency’s rise to buy four rental vehicles.
A divorced father of two teenagers, he no longer struggles to pay for their education.
Launching bitcoin as legal tender on September 7, 2021, Bukele said he wanted to bring the 70 percent of unbanked Salvadorans into the financial system and immediately began plowing public money into cryptocurrencies.
To encourage Salvadorans to use bitcoins he created the Chivo Wallet app to send and receive bitcoins for free and gave $30 to every new user.
His lofty ambitions for bitcoin came under fire from the International Monetary Fund (IMF), which hesitated to grant El Salvador a $1.3 billion loan due to its official use of the cryptocurrency.
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In August, however, the IMF announced a preliminary loan deal with El Salvador, while saying it had to mitigate “potential risks.”
Offered as an “option”
While Osorio has become relatively wealthy with bitcoin, a study by the University Institute of Public Opinion showed that 88 percent of Salvadorans had not yet used it.
“From the beginning … it was clear that it was clearly an inappropriate measure that the population rejected,” the institute’s director, Laura Andrade, told AFP.
A quarter of El Salvador’s GDP comes from remittances sent home by family members, mostly from the United States.
But in 2023 only one percent of transfers were in cryptocurrencies.
In an interview with Time magazine in August, Bukele acknowledged that while “you can go to a McDonald’s, a supermarket or a hotel and pay with Bitcoin,” it “hasn’t had the widespread adoption that we hoped for.”
Source: AFP
He added that “the positive aspect is that it is voluntary; we never forced anyone to adopt it. We offered it as an option and those who chose to use it benefited from the rise of Bitcoin.”
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He also confirmed that he had about $400 million in bitcoins held in a public “cold storage wallet” — a way to store bitcoins offline.
Bitcoin’s fortunes have been mixed.
This week it was trading around $52,000, from a high of $73,616 on March 13. In November 2022 it fell as low as $16,189.
Independent economist Cesar Villalona told AFP that Bukele himself blocked bitcoin’s uptake by stripping it of the normal functions of a currency.
“Bukele… said: there will be no salary in bitcoin, there will be no pension in bitcoin, there will be no savings in bitcoin and there will be no price in bitcoin, and in this way he removed the three functions of money,” he said Villalona.
Luis Contreras, an instructor at My First Bitcoin, told AFP that many Salvadorans were simply afraid to make the switch.
The organization has taken cryptocurrency to public schools, teaching about 35,000 students to use bitcoin so far.
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Contreras says the hardest thing about educating people on bitcoin “is their fear of new things, which creates fear of technology” as well as “the fear of going from a classic currency in the current economy to a completely digital and decentralized currency. “
Source: AFP
