Bitcoin solves problems
How El Salvador is becoming the most forward thinking open financial services center in the world, surprisingly.
A long term meme in cryptocurrency is that
It provides an opportunity for everyone in the world to have access to financial services (storage, loans, payments etc).
It is often maligned that this is impossible on bitcoin due to transaction limits.1
These arguments are often more noise than fact, but perhaps a better demonstration is more keenly observed playing out in real time in El Salvador.
This is the president of El Salvador and the “Chivo wallet” is a government provided, bitcoin lightning wallet which launched a little under 1 month ago (7th September 2021) on the day bitcoin official became legal tender in the country.
It now has 3 million active users or put another way 46% of the population of the country, in one month.
This is particularly interesting when considering that Bukele pointed to the 70%+ of the country had no bank and no access to financial infrastructure as a key drivers for adoption of bitcoin in the first place.
Since adopting bitcoin 46% of the country now has access to the most modern high end, open, global, financial system in the world.
IN ONE MONTH!!
This is a meaningful improvement in the figures of unbanked in the country, even if we assume that it was adopted by 100% of all the people who already had banking services.
Further this doesn’t even begin to count all of the people who choose to use open source alternatives to this government wallet, which are fully interoperable and usable in the country, but can’t easily be counted.
I would wager this has to be the fastest onboarding of the unbanked in history.
It wasn’t done by bureaucrats sitting around in NY setting goals, it wasn’t done by billionaire tech companies and it wasn’t achieved by pilot projects in refugee camps (that take a rather creepy view of your personal and biometric data).
It was achieved by an open money network and a bunch of people that gave enough of a shit to solve a problem.
The government, saw a small community getting youths out of gangs and into work, improving safety and stimulating the economy. Then wondered if it could work at a larger scale.
One month later financial services have been meaningfully expanded across the country, remittance fees are dropping and likely to provide a meaningful boost to the local economy. With estimates up to $400m per year to be saved on Western Union and MoneyGram fees alone.
Which begs the question, is the government of El Salvador the single most forward thinking, tech literate, opensource government on the planet?
Or is there something to this idea of joining a global, free money network on the internet and letting people solve problems :)
A bad argument covered in part here: