[2024-09-02] Latam Insights: Bukele Used Bitcoin as a Rebranding Tool; ...

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Latam Insights: Bukele Used Bitcoin as a Rebranding Tool; Bitcoin Mining Companies Stop Operating in Paraguay After Power Fee Hikes

Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news from the past week. In this issue: Salvadoran President Nayib Bukele acknowledges that bitcoin rebranded the country, some bitcoin mining companies have stopped operating in Paraguay after the recent power fee hikes, and Argentines lead Latam in stablecoin adoption.

Bukele States Bitcoin Was an Effective Rebranding Tool for El Salvador

Nayib Bukele, President of El Salvador and one of the most popular heads of state today, recently evaluated the process that El Salvador has gone through regarding its bitcoin allegiance and how it has affected the country’s image internationally.

In a recent interview given to Time Magazine, Bukele reflected on the benefits and downsides of adopting bitcoin as legal tender in 2021, when he passed the so-called Bitcoin Law with a supermajority in the Salvadoran Congress controlled by his party Nuevas Ideas (New Ideas).

While Bukele admitted that Bitcoin had not developed as he wanted it to, with only 12% of Salvadorans having made at least one bitcoin transaction after all the resources spent in the national Chivo bitcoin wallet, he explains that it also served for other purposes.

He stated:

It gave us branding, it brought us investments, it brought us tourism.

9 Bitcoin Mining Companies Suspend Activities After Power Fee Hikes in Paraguay

The income received by power sales to bitcoin miners is starting to be affected by the measures taken by the National Power Administration of Paraguay (ANDE). Hugo Rolon, ANDE commercial manager, stated that while there had been no contract rescissions as a consequence of the fee hikes enacted for bitcoin miners last month, service interruptions had indeed taken place.

According to local media reports, Rolon stated:

As for crypto mining clients, we have not processed contract cancellation requests; we do have nine clients who were cancelled due to non-payment of their invoices or because when they were regularized to the category, they communicated that they will not continue with the activity.

Several bitcoin mining industry representatives had warned about the effects of the recent power fee hike, which raised energy fees for miners by up to 16% depending on their power expenditure.

Bitso Report Shows Argentines Leading Stablecoin Adoption in Latam

A recent report by Bitso that surveys the behavior of Latam cryptocurrency users has found that Argentines are the largest purchasers of stablecoins in the region. The “Latam’s Crypto Landscape” report assesses that this has to do with several factors, including cultural ones, the exchange rate variation, and the high inflation registered during Q1 and Q2 2024.

These factors have made Argentines choose stablecoins over other crypto options, preferring to maintain the value of their savings instead of purchasing other cryptocurrencies as investments.

Julian Colombo, general director of Bitso Argentina, said this was a recurrent behavior in the Argentine cryptocurrency market. He stated:

Since 2023, we have noticed a boom in the crypto dollar. The stabilization of exchange rate volatility in 2024 contributed to a transition towards more volatile cryptocurrencies such as bitcoin or ether.

Source: https://news.bitcoin.com/latam-insights-bukele-used-bitcoin-as-a-rebranding-tool-bitcoin-mining-companies-stop-operating-in-paraguay-after-power-fee-hikes/

[Saint-loup]

While Bukele admitted that Bitcoin had not developed as he wanted it to, with only 12% of Salvadorans having made at least one bitcoin transaction after all the resources spent in the national Chivo bitcoin wallet, he explains that it also served for other purposes.

Those adoption figures are very interesting, they are lower than what many maximalists were expected but they don't surprise me very much, to be honest. It shows how this technology is very hard to understand for most people and to use unfortunately. This is not a user friendly technology and People need to be sufficiently educated and trained to use it. Time is needed for that. In addition, the high volatility of the asset repels people who can't bear it.

[cr1776]

While Bukele admitted that Bitcoin had not developed as he wanted it to, with only 12% of Salvadorans having made at least one bitcoin transaction after all the resources spent in the national Chivo bitcoin wallet, he explains that it also served for other purposes.

Those adoption figures are very interesting, they are lower than what many maximalists were expected but they don't surprise me very much, to be honest. It shows how this technology is very hard to understand for most people and to use unfortunately. This is not a user friendly technology and People need to be sufficiently educated and trained to use it. Time is needed for that. In addition, the high volatility of the asset repels people who can't bear it.

It reminds me of the MS-DOS/PC-DOS, VAX/VMS, Unix days vs Mac (and Sun and Apollo etc) and eventually Windows.  The human interface factor is critical here.  Everyone knows how to use a credit card or cash because it is easy.  Bitcoin wallets are not easy enough yet so that they hide all the technology behind them.  Everything needs to be abstracted so that people can just use it and have it work easily.  This takes time.