Killing a Bitcoin State: Bukele's Time Clock
Gary Gensler is nothing compared to the might of the Global American Empire. Bitcoiners must prepare for a Gaddafi like situation.
As the world grapples with the current complexities of geopolitics, the echoes of past events reverberate among our collective consciousness. I do not remember much about 9/11, but I do remember the overthrow of Muammar Gaddafi.
The overthrow and death of Libya's Gaddafi, a spectacle that unfolded on global television, left an indelible mark on many, including those too young, like myself, to fully comprehend the implications.
Today, as we observe the unfolding situation in El Salvador under President Nayib Bukele, the parallels are uncanny, albeit with significant differences. In order to prepare for the worst possible outcomes, Bitcoiners and those who support the industry must be aware of what the future might have in store for El Salvador’s President and how they might best respond to such a situation.
Narrative of an Overthrow:
To equate Bukele with Gaddafi would be a gross oversimplification. Gaddafi, a controversial figure, was known for his authoritarian rule and support for rebel and terrorist movements, making him a constant thorn in the side of Europe, NATO, and the United States.
Bukele, on the other hand, is navigating a different landscape, but the similarities in the media and governmental processes leading up to potential regime change are striking and should be taken seriously.
In 2021, Bukele made aggressive administrative moves to consolidate his rule in El Salvador, actions that were met with widespread criticism from various non-profits and media outlets.
Amnesty International's headline, "President Bukele's Human Rights Crisis," is a testament to the growing international concern. The narrative of human rights abuses and authoritarianism is a familiar one, often preceding interventions by the U.S. in the global order.
Bukele's aggressive adoption of Bitcoin as a national currency has further complicated the situation. This move, seen as a threat to the U.S.-dominated financial order, has led to the International Monetary Fund (IMF) threatening to withhold loans and financial aid. The potential use of state-issued Bitcoin bonds by the Russian government to move money adds another layer of complexity.
Bukele's abstention from the United Nations vote condemning Russia's invasion of Ukraine has further strained relations with the Biden administration. Bukele’s disobedience from the current established ordered has not gone unnoticed.
The U.S. Department of State has issued multiple warnings against El Salvador, including a travel advisory citing human rights abuses.
Accusations of election interference in the U.S. 2020 elections have further tarnished Bukele's image among U.S. officials.
The storm is brewing for Bukele. His stance on Bitcoin, coupled with allegations of election interference, authoritarianism, and human rights abuses, are all signals that his days in power may be numbered. Yet, Bukele has managed to maintain popularity among his local populace by reducing crime and implementing other popular measures.
However, popularity at home is not a guarantee of safety. The Biden administration has made its opinion on Bukele very clear.
“On February 9, Fitch downgraded El Salvador’s credit rating, solidifying its place as the worst in Central America by the “Big Three” U.S.-based risk evaluators. “Weakening of institutions and concentration of power in the presidency have increased policy unpredictability,’ wrote Fitch, “and the adoption of bitcoin as legal tender has added uncertainty about the potential for an IMF program that would unlock financing for 2022-2023.”
The agency noted that El Salvador will need to pay back $1.3 billion in loans from August to October of this year, as well as another $800 million in January.
As the IMF, World Bank, and the current global order potentially take tougher stances against Bukele, he may be forced to seek assistance from China or Russia.
Such a move would be exactly what the U.S. wants, which would likely solidify his fate and provide the ultimate justification his removal from power.
Biding Time
Fortunately for Bitcoiners, immediate action against Bukele seems unlikely. There is a strategic advantage in allowing Bukele to continue his current course, attracting certain types of companies and individuals to El Salvador.
This could provide the U.S. with valuable insights into the motivations, strategies, and strengths of Bitcoin enthusiasts. El Salvador may be a strategic honey pot, attracting huge amounts of infrastructure to one area.
With an upcoming election, the current administration would be wary of any foreign policy move that could backfire and add fuel to the fire of the president's election woes. However, that does not mean covert operations will not be utilized, much like the “protests” in El Salvador where Bitcoin ATM’s were looted and burned.
Can We Win?
The road ahead for Bitcoiners is indeed complex. With limited resources and a community that is sometimes divided and politically inept, options are limited. However, this should not deter one from pushing forward. Here are some observations and recommendations:
Bukele had a close relationship with Trump, which might be one reason why the Biden administration is not fond of him. Supporting Trump, or not supporting Biden, may be your only practical large-scale foreign policy option.
Bitcoiners with close ties to the Biden Administration or the Democratic party could make their support and funding contingent upon support for El Salvador's Bitcoin initiative.
Politicians in El Salvador may want to hasten efforts to get other countries in Central and South America to adopt Bitcoin as a currency. Bukele must resist the temptation to align with countries that pose threats to U.S. national security interests (such as Cuba, Russia, China, Iran), and instead look for more friendly parties.
El Salvador could establish connections with U.S. states and try to secure a degree of safety through economic dependency.
Chambers of commerce, large companies, and non-profits in the digital asset space could recognize the importance El Salvador holds for the industry and find ways to support Bukele. This could be through media, marketing, or helping develop relationships in Washington D.C.
Bukele could attempt to establish connections with large traditional finance institutions like Blackrock and Blackstone. The lobbying power of such institutions would ensure a degree of safety, albeit with the tradeoff of potentially crushing smaller businesses in the area and possibly creating further dependency on the U.S.
Bitcoiners making heavy investments in El Salvador may want to consider the worst-case scenario, and how they might handle the loss of infrastructure and manpower. What is your backup plan?
Conclusion:
The political situation in El Salvador under President Nayib Bukele is a complex and evolving narrative. The echoes of past events, such as the overthrow of Gaddafi, serve as a stark reminder of the potential outcomes. Bukele's bold decisions, particularly the adoption of Bitcoin as a national currency, have placed him in the international spotlight.
El Salvador is a beacon of hope for many Bitcoiners. However, they may soon find themselves amidst a situation in which none of them will have any experience: a possible coup. Bukele’s situation should be stark reminder to many Bitcoiner’s that the stakes are high, and the United States takes Bukele’s actions very seriously.