El Salvador’s Path Forward: Security Successes and Crypto Challenges

El Salvador has emerged as a nation of interest under President Nayib Bukele, who assumed office in 2019. A recent public opinion poll highlights the president’s robust support, which is deeply rooted in enhanced security measures, while his cryptocurrency policies attract little interest among citizens.

Bukele’s Popularity: What Drives It?

A recent poll showcases Bukele’s overwhelming approval, with 91.9% of respondents expressing a favorable opinion, whereas a mere 1.8% disapprove. His popularity is largely attributed to successful security strategies, including a no-nonsense approach to gang-related violence, which involved constructing a large correctional facility. This has played a vital role in gaining public trust.

Improvements in security conditions stand out as the key factor in gaining public trust.

This focus on security has led to a marked decline in crime rates, especially homicides, significantly benefiting the community.

Where Does Bitcoin Stand in El Salvador?

The nation made headlines globally in 2021 by recognizing Bitcoin as legal tender, yet its day-to-day usage remains limited. A mere 2.2% of poll participants oppose this cryptocurrency initiative, while overall interest in digital currencies appears minimal.

Bukele admitted in an interview last year that the project hasn’t gained the expected traction.

Despite facing skepticism, the government maintains a steady course, purchasing Bitcoin regularly to bolster its reserves. Concurrently, El Salvador is in talks with the International Monetary Fund (IMF), cautiously balancing their crypto policy with international agreements and securing significant financial backing for 2024.

Potential Outcomes for Chivo Wallet

Amid negotiations, the state-run Chivo digital wallet’s future remains uncertain, marred by issues such as fraud and technical errors. This has led to discussions on whether it might be privatized or closed.

Should this public platform cease operations, private wallets are expected to fill the gap, fostering a new financial landscape. Meanwhile, El Salvador secures $1.4 billion from the IMF, with a predicted economic growth rate of 4% this year, underscoring the evolving fiscal landscape.