- Italy targets climate activists in 'anti-Gandhi' demo clampdown
- US trade chief defends tariff hikes when paired with investment
- EU court blocks French ban on vegetable 'steak' labelling
- Meta AI turns pictures into videos with sound
- US dockworkers return to ports after three-day strike
- DR Congo to begin mpox vaccination campaign Saturday in east
- Meta must limit data use for targeted ads: EU court
- Oil extends gains, jobs report lifts Wall Street
- US hiring soars past expectations in sign of resilient market
- As EU targets Chinese cars, European rivals sputter
- Top EU court finds against FIFA in key transfer market ruling
- Oil extends gains, Hong Kong stocks resume rally
- 'A man provides': Ukrainian miners send families away as Russia advances
- EU states greenlight extra tariffs on EVs from China
- Hong Kong stocks resume rally, oil dips after Middle East-fuelled surge
- Crude stable after Israel-Iran surge, Hong Kong stocks resume gains
- Hera spacecraft to probe asteroid deflected by defence test
- US dockworkers to head back to work after tentative deal
- After Helene's destruction, North Carolina starts to rebuild
- Dockers end three-day strike at Montreal port
- What next for OpenAI after $157 billion bonanza?
- Israel-Hamas war causes 86-percent dive in Gaza GDP: IMF
- Milan's Morata moves house after Inter-fan town mayor 'violates' privacy
- 'Devastating' storm hits Augusta National but Masters will go on
- Relief in Brazil, Asia over delay to EU deforestation rules
- Oil prices jump, stocks fall on Middle East tensions
- Biden says 'discussing' possible Israeli strikes on Iran oil facilities
- Oil prices rise, stocks fall on Middle East tensions
- Oil rallies, stocks mostly retreat on Middle East tensions
- Phasing out teen smoking could save 1.2 mn lives: study
- 'Welcome relief': Asia producers hail EU deforestation law delay
- Japan PM slated to announce plans for 'happiness index'
- Turkish inflation falls less than expected in September at 49.4%
- Easing inflation lifts profit at UK supermarket Tesco
- Skiing calls on UN climate science to combat melting future
- China wine industry looks to breed climate resilience
- Tokyo rallies on weak yen, Hong Kong drops after surge
- Dutch airline KLM unveils 'firm' cost-cutting measures
- Carpe diem: the Costa Rican women turning fish into fashion
- Senegal looks to aquaculture as fish stocks dwindle
- Will AI one day win a Nobel Prize?
- Climate change, economics muddy West's drive to curb Chinese EVs
- Argentina's Milei vetoes university budget after huge protests
- TotalEnergies plans to grow oil and gas production until 2030
- 2024 Nobels offer glimmer of hope as global crises mount
- Tokyo rallies on weak yen, Hong Kong reverses after surge
- Tunisia readies for vote as incumbent Saied eyes victory
- High childcare costs in US weigh on women's employment
- US voters seek help with crushing childcare costs
- Taiwan shuts down for second day as Typhoon Krathon to land
El Salvador marks 1st year of Bitcoin use as confidence wanes
A year ago, El Salvador began accepting Bitcoin as legal tender following a controversial and much criticized decision by President Nayib Bukele.
All seemed rosy for the first few months as citizens enthusiastically embraced the new opportunity, but Bitcoin's value has plummeted since and some experts say the move has been a failure.
Maria Aguirre, 52, a shopkeeper in the El Zonte seaside resort that has been a major center for Bitcoin use, says things were going well last year as Bitcoin's value rose from $52,660 at opening on September 7, 2021, to briefly over $68,000 a couple of months later.
"But over the last five months it's been only falling," said Aguirre, who continues to accept Bitcoin transactions.
Bitcoin has dipped under $20,000 for most of this September.
In El Zonte, around 60 kilometers southwest of capital San Salvador, Bitcoin was already being used before Bukele's move, which was designed to encourage a population where only 35 percent of people owned an account at a financial institution in 2021, according to the World Bank.
El Salvador became the first country to accept Bitcoin as legal tender, alongside the US dollar that has been the official currency for two decades.
The government even created the Chivo electronic wallet and granted each user the equivalent of $30.
By January, the application had been downloaded four million times, according to Bukele -- an impressive amount in a country of 6.6 million, although with a diaspora of three million living mostly in the United States.
Bukele's idea was to ensure that remittances, which make up 28 percent of El Salvador's GDP, be sent by Chivo meaning less money lost in commission to exchange agencies.
However, former central bank president Carlos Acevedo says the body's records show that "less than two percent of remittances are arriving through digital wallets, which means that this hasn't been a benefit either."
University student Carmen Majia, 22, said she used Bitcoin in the beginning "but given how things are going, now I don't trust it and I uninstalled the application."
- Volatility -
When Bukele's plan was launched, Aguirre had already been using Bitcoin for eight months in the Pacific seaside resort that is popular with surfers.
After Bitcoin shot up in value between September and November 2021, Bukele announced a plan to build Bitcoin City -- a tax haven for cryptocurrencies and blockchain technology on the Gulf of Fonseca that would be powered by geothermal energy from the Conchagua volcano.
To build it, Bukele was going to issue $1 billion in Bitcoin bonds but those plans were delayed by the volatile cryptocurrency market that saw some less robust currencies crash and Bitcoin take a huge hit.
According to the credit rating company Moody's, Bukele's plan has cost El Salvador $375 million.
Taking advantage of the drop in value, Bukele bought 80 Bitcoins at $19,000 each in July, taking El Salvador's total holdings to 2,381 units of the cryptocurrency, all bought over the last year.
In June he told compatriots to "stop looking at the graph" insisting that Bitcoin is a secure investment that will bounce back up.
"Patience is the key," he said.
- Little enthusiasm -
But Acevedo insists that the use of Bitcoin "really has not worked" and that "so far it has really been a failed bet."
But not a total failure "because it could recover and get out of this crypto winter."
Acevedo says Bitcoin has not produced Bukele's stated aim of "financial inclusion" and its fall in value has "psychologically influenced people who do not view it with enthusiasm."
The adoption of Bitcoin has also complicated El Salvador's attempts to secure a $1.3 billion loan from the International Monetary Fund, which had urged against the move.
Faced with a warning that the country could default over its public debt that has surpassed 80 percent of GDP, Bukele announced in June a plan to buy back bonds due to expire in 2023 and 2025.
He insists the country has the cash to do so.
That reduced the country's risk from 35 percent to 25 percent but Acevedo says El Salvador will not be able to return to the debt markets until that figure comes down to "at least five percent."
In El Zonte, Cheetara Hasbún, a hotel employee, still thinks Bitcoin is a "good payment" method and just "needs more time, as was given to the dollar."
A.Agostinelli--CPN