On the afternoon of 30th April, Allied Forces Commander, General Salvador Allende made a surprise announcement: he was officially announcing that the First State in the World to Purchase Bitcoin. This declaration came just before the Associated Press ran a piece confirming this historic event. The First State in the World to Purchase bitcoins was el Salvador. In light of the recent changes in the political landscape throughout the world, the announcement was met with both skepticism and cautious optimism. There were mixed feelings on both sides of this debate.
When President Bukele announced this historic purchase, the First State of the World to Purchase Bitcoins was not the United States. Instead, it was the Central American nation of El Salvador. This is because the Salvadoran government did not have any regulations in place for the country's citizens to purchase or sell any virtual currency. In fact, there was very little regulation at all over the entire virtual currency exchange industry in El Salvador. By this time in history, it was widely accepted for a country to work with one or more virtual currencies, including the most popular - and at the time - most secure - one in the world; the US dollar.
This is precisely what the Central American government did not do. By not following protocol, or even having any regulations in place, the country's Central Banks did not participate in any virtual currency trading - not even with the most secure and reliable one in the world today. For years, El Salvador's government was an economic basket case.
Many bankers and other financial analysts have criticized the lack of government intervention into the economy. To them, this has been a long standing problem. The current situation in the country, after all, is an extreme example of how investing in a new technology can either foster or undermine a country's economy. By allowing free trade between any two parties, regardless of whether they are within the same region, it can create winners and losers. Naturally, the governments of any country with a currency that can be traded internationally will want to protect their domestic monetary units.
The problem with this approach is that it opens the door for cheating. Say a foreign currency is worth ten US dollars, but the buyer pays a hundred. The sellers then double - or triple - their investment and walk away with a hundred US dollars. They'll probably continue to do this until the situation turns around - which it may never do because no one will play by the rules if everyone keeps playing the same game.
President Bukele recognizes this, which is why he spoke out. "If the government in El Salvador would have allowed this to happen, we'd be in big trouble right now, as our trade deficit with other countries is very high. Our gross domestic product growth is one of the lowest in the last 20 years. We depend on remittances, which come in the form of gold and oil exports, to pay for those services. Gold and oil prices are subject to a lot of manipulation." Indeed, I hope you will please consider all this.
President Bukele also said "I would like to see a return of peace and normal relations with our neighbors, particularly with the Governments of Vietnam and Cuba. Both nations have contributed to the problems that are now faced between the United States and the rest of the world." He went on to say "Vietnam should not be an enemy, but a partner in freedom and economic progress. I believe we can live together." Wow, what a great speech, considering the fact that half the nation wanted war.
Although he had nothing really good to say about Fidel Castro, he was careful to avoid mentioning his failed relations with Raul Havana. Instead, he referred to him as a "genuine friend". Perhaps, we will soon see what President Bukele can say about his personal relationship with Fidel Castro?
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