President Nayib Bukele has once again made himself heard on Twitter. The president of El Salvador is known for using this medium to disseminate his policies, and it continues to do so. This time it concerns the announcement that El Salvadorians will receive a 20 dollar cent (17 euro cent) discount on every gallon of gasoline they pay with the Chivo wallet.
2 positive news for the pockets of Salvadorans in a few minutes …
– Nayib Bukele ???????? (@nayibbukele) September 30, 2021
As you may know, the Chivo wallet is the one developed by the El Salvadoran government bitcoin wallet. This discount on petrol seems to be Bukele’s next weapon to promote the use of the wallet among the population. With this, the government of Bukele artificially ensures that the rising gasoline prices do not have to be fully borne by the El Salvadoran people.
Question marks over this new policy
It is not clear what exactly we should think of this. In Bukele’s words, this is an agreement between the largest gas stations in El Salvador and the state-owned company Chivo. What it probably comes down to is that the government will make up for the discount of 17 cents per gallon of gasoline itself with money from the tax pot. This means that El Salvadorians indirectly pay for the petrol themselves and that Bukele and his government are mainly concerned with promoting the Chivo wallet.
It seems that Bukele’s government is committed to making bitcoin adoption in the country as fast as possible. These kinds of resources actually force people to start using the Chivo wallet. It remains a voluntary choice to download the wallet, but if you don’t, as an El Salvadorian you are a thief of your own wallet.
As a proponent of bitcoin, you could argue that, despite its coercive nature, this is a good measure. If you are convinced that the adoption of bitcoin will help the population of El Salvador in the long term in an economic sense. Then a measure like this, despite its dictatorial character, is ultimately a good decision for the country. However, this does not alter the fact that it is at odds with some norms and values from Western society.
No limits on the promised discount
The cost advantage when using the Chivo government wallet has no limit and can be used by public transport, entrepreneurs, companies and citizens. “It’s an immediate relief for the wallets of El Salvadorians,” Bukele said on Twitter. In addition, the measure has a depressing effect on the costs of transport in the production chains.
Which in theory means cheaper production for companies and therefore a lower general price level. The strange thing about the whole is that the government probably has to pay for this one way or the other. Which means that the taxpayer is ultimately left with the bill. Now, though, it’s happening in a way that most people probably don’t realize.
Bitcoin adoption in El Salvador remains a special phenomenon to keep an eye on. President Bukele makes many seemingly contradictory decisions. On the one hand, he makes decisions of a dictatorial nature and on the other, he adopts bitcoin as legal tender, a currency built precisely to reduce the power of centralized parties.
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