The United States appears to be putting further pressure on El Salvador, which is moving through with plans to use bitcoin (BTC) as legal cash alongside the US dollar.
Tensions between El Salvador’s President Nayib Bukele and the US administration of Joe Biden have been building, and Victoria Nuland, the US Undersecretary for Political Affairs, met with Bukele yesterday for face-to-face negotiations.
Nuland expressed “hope” that El Salvador and the International Monetary Fund (IMF) would finish the agreement “after the country’s stunning move to make bitcoin legal tender,” domestic press outlets were less positive about the summit. Nuland was accompanied by Julie Chung, the Deputy Assistant Secretary of State for the Western Hemisphere, who had previously warned about the Bukele government’s approach to China ahead of the conference.
Beijing has recently been generous with financial support for El Salvador, which has alarmed Washington.
Nuland also cautioned Bukele to keep an eye on a list the US plans to disclose in the coming days, which will “contain the names of Salvadoran officials tied to corruption,” according to ElSalvador.com. “These officials will be sanctioned with the loss of their American visas for at least three years,” the media site reported.
Bukele had described the list as “political” in the days leading up to the conference.
Nuland also cautioned Bukele that the United States was growing concerned about the government’s expanding control over the Salvadorian judiciary and domestic press freedom.
She’ll be disappointed to find, though, that such American pleas have so far gone unheeded, with a group of Bukele supporters nominated as judges on the Salvadoran Supreme Court on the day of her visit, according to domestic media. According to Elsalvador.com, the National Assembly swore in five new Supreme Court magistrates, with the group’s new leader hailing from the same pool of pro-Bukele lawyers that successfully deposed Constitutional Court judges earlier this year.
The new magistrates will rule over the Supreme Court until 2030, according to critics, giving Bukele a vice-like hold on the government’s various organs.
The tensions between Washington and El Salvador are likely to persist, as neither party appears willing to back down at this point.
Meanwhile, with little over two months till the country accepts BTC as legal cash, Bukele’s government is pushing ahead with development plans. According to La Prensa Gráfica, Finance Minister Alejandro Zelaya has elaborated on the government’s plans to launch two state-sponsored cryptocurrency wallets and payment platforms. B2B and B2C versions of the Chivo are already under development, with the finance head stating that the former will be made “attractive” for businesses.
Apart from promises to secure commission-free payments, Zelaya did not go into detail about the benefits of utilizing the app, but teased:
“We have to design the B2B wallet in such a way that it is appealing to corporate users; otherwise, no one would use it.”
Critics have criticized Bukele, claiming that the government is immediately awarding the contract to the app’s developer rather than holding an open public bidding procedure. Bukele has not stated whose company is developing the software, but many believe Strike, an American BTC startup, will be engaged in some way.
ElSalavador.com compared the move to the government of the day’s decision in 2010 to award a contract for electronic public transportation payment to the Latin American firm Sistema nico de Boletos Electrónicos (Subes). The government in question was the FMLN administration, which has been widely chastised. Since then, the FMLN has plummeted from favor and is now one of the smallest parties in the National Assembly. Three of the party’s four members of parliament have started two separate attempts to overturn the new law.