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Adoption of Bitcoin as legal currency sparks protests in El Salvador

Protestors claim the currency could destabilise the economy and is being used to distract from wider issues

Thousands of Salvadorans have taken to the streets of the Central American country’s capital to protest against president Nayib Bukele and his decision to adopt Bitcoin as a legal tender.

The crowd of an estimated 4,500 people marched while holding banners reading "Bukele Dictator", "No to Bitcoin", and "Respect the Constitution", with some setting fire to Bitcoin ATM machines.

Various segments of the population were represented in the protest, from labour unions, farmers, and healthcare workers, to university students, LGBTQ activists, El Salvador’s indigenous communities, and members of the opposition party, according to Reuters.

The backlash comes following brewing discontent among El Salvador’s population, with many believing that its government’s adoption of the cryptocurrency is being used as a distraction from widespread scrutiny of its policies. Many also believe that the cryptocurrency could bring added uncertainty into an already troubled economy.

Days before becoming the first country to use the cryptocurrency as a legal tender alongside the US dollar, El Salvador’s top court ruled that Bukele was allowed to run for reelection in 2024, after being criticised for replacing five Supreme Court judges and the independent attorney general back in May.

Over 68% of Salvadorans disagree with using Bitcoin as a legal tender, with only 4.8% of the population understanding what Bitcoin is and how it’s used, according to a recent study by the Central American University (UCA).

In the days after El Salvador adopted Bitcoin on 7 September, the value of the cryptocurrency slumped from £38,000 to £34,000 overnight, falling to £32,400 on 10 September.

Although somewhat bouncing back to £34,700, as 16 September, it’s still worth around £4,000 less than it was before being adopted by El Salvador.

Bitcoin’s extreme volatility has been apparent throughout 2021, with its value skyrocketing at the beginning of the year.

A number of governments, such as China and Turkey, have introduced policies aimed at restricting the adoption of cryptocurrencies and calling for increased regulation.

However, the protests come amid news that Ukraine could be the next country to adopt Bitcoin as a legal tender. Reports suggest that the Eastern European country’s government officials have met with counterparts in El Salvador ahead of passing legislation.

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