El Salvador is racing to be the future of bitcoin

Eric Grill is sitting on the patio of a house with multicoloured walls, screeches of nearby tropical birds covering his voice as he expounds on the future of bitcoin in El Salvador. Grill, an American man with blue eyes and short dark hair, is only mildly miffed. “It’s like a jungle here,” he says. “There’s been a little bit of an adjustment but I have this place for a month, I’m here for the long haul.”

A few weeks ago, Grill listened to El Salvador president Nayib Bukele’s announcement, at a bitcoin conference in Miami, that the country would adopt bitcoin as a legal tender – and shrugged it off as the usual politico bluster. When the country actually passed a law implementing Bukele’s promise, on June 9, Grill packed his bags and descended to the Central American country. Despite the house’s slow internet and lack of hot water, he feels optimistic.

As the CEO of Chainbyte – a company that manufactures Bitcoin ATM machines converting dollars into the cryptocurrency and vice versa – Grill decided to relocate his company’s production here from China. “We were having a lot of shipping problems with China,” he says. “We’re gonna export them from here to the United States. But we’re going to keep a lot of them here.” He expects that, as the bitcoin law starts being applied on September 7, El Salvador’s demand for his machines will grow; he is already receiving inquiries from several local banks.

The passing of Bukele’s Bitcoin Law has been met with scepticism and worry by essentially every financial institution on the planet, starting with the World Bank and the International Monetary Fund. Bitcoin’s volatility, exemplified by its plunge to about $30,000 (£21,000) this week, after grazing $65,000 in April, has been lambasted as a recipe for financial disaster. Citizens will be allowed to pay taxes in a currency that might depreciate in hours, suddenly draining the government’s coffers. Trust in Salvadoran government bonds is expected to be shattered. Anti-corruption experts worry that local and foreign gangs may take advantage of an announced governmental trust fund to swap bitcoin of dubious provenance with US dollars – El Salvador’s other currency, with which convertibility will be ensured. But one crowd has welcomed Bukele’s initiative with enthusiasm – and that is the bitcoin crowd.

Young, bearded, brash, and fluent in memes, 39-year-old Bukele always had the physique du role to cater to the laser-eye brigade. Since his Miami announcement, he has become a regular on bitcoin podcasts and English-language crypto-confabs on Clubhouse. Building on his hobnobbing with the crypto-initiated, he has deftly landed more PR coups, announcing that anyone ready to invest three bitcoin (today, about $100,000) in El Salvador will be immediately granted permanent residency, and that capital gains on bitcoin will not be taxed. Bukele has also talked up the country’s volcanoes as ideal locations for bitcoin miners hungry for cheap geothermal energy amid China’s crackdown on cryptocurrency. The volcano-touting, in all its Bond villainesque glory, was bound to stick, and now a bunch of bitcoin entrepreneurs sport volcano emojis – alongside El Salvador’s flag – in their Twitter bios.

The high point of El Salvador’s publicity offensive was the invitation of some 30 bitcoin entrepreneurs to visit the country and meet with government officials, two weeks ago. Leading the delegation was Brock Pierce, a flamboyant former child actor and current cryptocurrency investor and advocate who last year ran for US president on a pro-technology platform. (Ahead of his visit, Pierce was mocked for tweeting the front page of a Spanish-language Long Island newspaper apparently reporting on his trip, which was nowhere to be found in the newspaper’s online archive. The front page eventually appeared in the archive two days later, as a “special edition”.)