On Saturday, June 5, Salvadoran president Nayib Bukele announced that Bitcoin would become legal tender in his country. His speech wasn’t made in the capital San Salvador, but at the Bitcoin 2021 conference in Miami. Four days later, the declaration became law and was approved by El Salvador’s congress.
The Bitcoin conference was fertile ground for bluster regarding the adoption of cryptocurrency in Latin America. At one point, attendees filled dumpsters with worthless Venezuelan bolívares to mark the inevitable death of fiat currency across the region.
For members of the opposition media back home in El Salvador, Bukele’s announcement was a clear diversion — “Bukele wants us to talk about Bitcoin” rather than the country’s problems, including fraught ongoing negotiations with the International Monetary Fund and strained relations with the U.S., whose vice president, Kamala Harris, was in the region, but bypassed El Salvador. Even more significantly, on the eve of the Bitcoin announcement, the Salvadoran government broke ties with the International Commission Against Impunity in El Salvador (CICIES), dismaying the U.S. Regional and international media ran with the crypto announcement instead.
Latin American politicians soon followed Bukele’s lead, expressing their own interest in adopting the cryptocurrency as legal tender in the following days. The trend was propelled by a global community of crypto-enthusiasts, often with little knowledge of these countries’ local contexts. Tyler Winklevoss, of The Social Network fame, tweeted: “First they ignore you, then suddenly Paraguay, Argentina, Panama, Brazil, El Salvador, and Nicaragua embrace #Bitcoin.”
Whether or not any of these countries will actually adopt Bitcoin remains to be seen. But the announcements have already served another purpose: elevating the profiles of young, upstart politicians.
Panama’s Gabriel Silva, who may have been worried about losing his country’s spot as Central America’s financial hub, tweeted out his support for Bitcoin adoption two days after Bukele. Silva is an independent congressman outside of the country’s party political apparatus, with little chances of getting such a law passed in the short-term. Nevertheless, his Twitter following virtually doubled in the days after his announcement.
Congressman Francisco Sánchez is from the remote city of Neuquén. It is a Patagonian region of Argentina, known for decrying underrepresentation in a political system centered around Buenos Aires. Though he has yet to propose any legislation, he briefly changed his profile picture on Twitter to depict himself with laser eyes, a meme associated with cryptocurrency superfans. It has been his most successful tweet to date, with over 7,000 likes.
Brazil’s Fábio Ostermann also added laser eyes to his Twitter profile, giving the congressman’s personal brand a brief bump amid the country’s fragmented political system. His party holds just over 1% of seats in the country’s lower house.
And in Mexico, state congresswoman Indira Kempis Martínez also came out in support of Bitcoin adoption, drawing on her small party’s knack for capitalizing on viral trends and charismatic influencers. Samuel García, also a member of Movimiento Ciudadano, won the recent gubernatorial election in her state in part by banking on those very tactics.
Latin American politicians, it seems, have realized the career-making potential of the crypto-hype machine.
One of the staunchest early supporters of El Salvador’s Bitcoin law is Carlos Rejala, a 36-year-old legislator from Paraguay’s Chamber of Deputies. A political newcomer, Rejala has only been in politics since 2018, and belongs to the country’s upstart Hagamos Party, which has only two legislators in a lower house of 80 members. He came out in support of El Salvador’s Bitcoin law on social media and promised the start of “an important project to renew Paraguay this week.”
A millennial who arrived at politics from the private sector, Rejala sees himself reflected in Bukele — in Rejala’s case, specifically from the tech sector. “I sleep, breathe, eat, and shit tech,” he told Rest of World. He sees any future political aspirations as profoundly linked to this technological identity.
“I’m just one deputy,” he said when asked how likely it was that a Bitcoin law would get passed in Paraguay. “For me, the first step is to show that I am being backed up by the world’s top voices.”
Rejala’s public support for cryptocurrency led him to being contacted by outlets including Coindesk and The Street, as well as being followed by Twitter CEO Jack Dorsey, drawing him out of local obscurity and into the international limelight.
In practice, it remains unclear what the impact of cryptocurrency adoption will really be in the region. In El Salvador, the specifics of the law are far less radical than Bukele’s announcement implied. Most of the law’s purported benefits stem from the Bitcoin-adjacent tax incentives for foreign businesses looking to invest in El Salvador and improvements proposed to boost the country’s connectivity rates.
Mariana Belloso, a Salvadoran journalist and editor of Derecho y Negocios, does not see any further concrete economic benefits from the measure. “The president understands that you can’t base your national economy on something as volatile as Bitcoin,” she told Rest of World. Belloso believes that Bukele’s aim was for “the announcement to be spectacular,” and in that he certainly succeeded.
Politicians like Bukele, Silva, and Rejala represent a microcosm of their countries’ positions on the global stage. Small but ambitious Latin American nations may be embracing Bitcoin to bolster their status.
Countries like El Salvador, Paraguay, or Panama are “not geopolitically influential,” said Ojeda Caracas, a Venezuelan lawyer specializing in Bitcoin and crypto-assets. “It’s not as if China — not gonna happen — or Russia or the U.S. had announced that Bitcoin would be their new legal tender, you know?”
“The U.S., China, and Brazil are all designing their own cryptocurrencies, but under the auspices of their own central banks.” said Rejala. “This gives us an opportunity to show that Paraguay is open to Bitcoin when others are not.”
Rejala refused to go into detail about how the infrastructure for a Bitcoin payments system would be built, or how Paraguay would deal with Bitcoin’s volatility, leaving “those regulatory questions to future debate.”
“What’s going to happen with Bitcoin is that one just needs to adopt it, and then everyone will follow suit,” he said.