Napoleon Osorio is proud to be the first taxi driver to accept payment in bitcoin in El Salvador, the first country in the world to legalize cryptocurrencies.
He credits President Nayib Bukele’s decision to trust bitcoin three years ago with changing his life.
“Before I was unemployed … and now I have my own business,” said the 39-year-old businessman, who uses an app to charge for rides in bitcoin and now runs his own car rental company.
The Central American nation’s leader took a big gamble three years ago when he made bitcoin legal circulation in a bid to revive El Salvador’s dollar-based, remittance-dependent economy.
They invested hundreds of millions of taxpayers’ dollars in cryptocurrencies, despite warnings from global institutions about the risk of volatility.
Osorio credited John Dennehy, the American founder of the NGO My First Bitcoin, for encouraging him to accept payments in cryptocurrencies.
He now has 21 drivers working for the BitDriver brand and has earned enough profit from the currency appreciation to buy four rental vehicles.
As a divorced father of two teenagers, he no longer has difficulty paying for their education.
Launching Bitcoin as a legal currency on September 7, 2021, Bukele said he wanted to bring the 70 percent of Salvadorans who do not use banks into the financial system and immediately began investing public money in the cryptocurrency.
To encourage Salvadorans to use bitcoin he created the Chivo wallet app to send and receive bitcoin for free and gave $30 to every new user.
His great ambitions for Bitcoin fell flat in the face of the International Monetary Fund (IMF), which hesitated to grant El Salvador a $1.3 billion loan due to the cryptocurrency’s official use.
However, in August the IMF announced a preliminary loan agreement with El Salvador, saying it needed to mitigate “potential risks”.
– Presented as an ‘option’ –
Although Osorio has become relatively wealthy thanks to bitcoin, a study by the University Institute for Public Opinion showed that 88 percent of Salvadorans have not yet used it.
“It was clear from the start that this was an ill-advised measure that was rejected by the public,” the institute’s director Laura Andrade told AFP.
One-quarter of Salvador’s gross domestic product comes from money sent home by family members, mostly from the United States.
But only one percent of transfers in 2023 were made in cryptocurrencies.
In an interview with Time magazine in August, Bukele acknowledged that “you can go to McDonald’s, a supermarket or a hotel and pay with bitcoin,” but that it “has not had as widespread use as expected.”
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 have benefited from the rise in bitcoin.”
He also confirmed that he holds about $400 million worth of bitcoin, which is held in a public “cold storage wallet” — a way of storing bitcoin offline.
Bitcoin’s fortunes have been mixed.
It was trading at around $52,000 this week, down from a peak of $73,616 on March 13. It fell to a low of $16,189 in November 2022.
Independent economist Cesar Villalona told AFP that Bukele himself has hindered the circulation of bitcoin by depriving it of the normal functions of a currency.
“Bukele said: there will be no salaries in bitcoin, there will be no pensions in bitcoin, there will be no savings in bitcoin and there will be no prices in bitcoin, and in doing so eliminated the three functions of money,” Villalona said.
Many Salvadorans are afraid to make the transition to bitcoin, Luis Contreras, instructor at My First Bitcoin, told AFP.
The organization has also brought cryptocurrency to public schools, teaching nearly 35,000 students how to use Bitcoin so far.
Contreras says the most difficult thing about training people on bitcoin is “their fear of new things, which leads to fear of technology” as well as “the fear of moving from a traditional currency to a completely digital and decentralized currency in the current economy.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
