Jorge E. Cuéllar has emerged as one of the most articulate critics of El Salvador's controversial Bitcoin experiment. The country, led by Nayib Bukele, has been in the news a lot lately, making Bitcoin into legal tender, announcing a Bitcoin City, and even the issuance of $1 billion-worth Volcano Bonds, half of which would go towards investing into Bitcoin and the other half would go into building and expanding Bitcoin-mining facilities built around the country's volcanos.

Jorge offers a very grounded historical and political reading of the situation in El Salvador, what prompted Bukele to adopt such measures, and how the ordinary Salvadorans have reacted.

Of the people we have interviewed so far, Andrés Arauz, the Ecuadorian politician, offered a more optimistic reading of the situation, while Izabella Kaminska, of Financial Times, was rather critical. This interview was conducted with the help of Ekaitz Cancela.

~ Evgeny Morozov

Keywords: El Salvador, Latin America, Volcano Bonds, bitcoin, fiduciary colonialism


Let’s dig into the El Salvador case. The story is more complex than most of the Bitcoin-obsessed media accounts suggest. There’s also the Bitcoin Beach, the Bitcoin City, the Volcano Bonds, the Chivo wallet. Could you help us make sense of these various strands of the story?

In June 2021, Nayib Bukele announced that he would pass legislation to make Bitcoin legal tender in El Salvador immediately as well as to launch a government-issued wallet, Chivo, in September 2021. In the few months leading to the launch, Salvadorans would become educated about cryptocurrency, about using the Chivo wallet to send and receive remittances, and about blockchain in general, to prepare them to accept transactions in Bitcoin.

The legislation, known as the “Bitcoin Law,” mandated every business in El Salvado to accept Bitcoin transactions. This move, in addition to other issues around Bukele’s authoritarian power grabs, prompted mass protests and discontent. The Bitcoin plan, aside from having little to do with the hardships faced by ordinary Salvadorans, was widely panned due to its hasty implementation, the opaqueness of the Chivo wallet, technical shortcomings, and little public knowledge about the entire matter.

To many Salvadorans, it appeared as an absurd proposition – and a repeat of 2001’s dollarization – that had no connection to popular needs. Curiously, it also fit with Bukele’s authoritarian designs to sidestep likely sanctions from the US as a result of eroding diplomatic cooperation. Further, bitcoin would generate money for Bukele to fund his infrastructure projects without needing to resort to international lending institutions or striking alliances with the influential figures in the Salvadoran business sector that he has alienated.

In this sense, it was financial decentralization as a matter of necessity, a little more than just piety to cyber-libertarianism.

In this political climate, there is really no guarantee that any Bitcoin-related proposal is what it purports to be. This is all to say that the anti-Bitcoin protests then, under #NoAlBitcoin, are not just about the cryptocurrency, but rather about what is has come to represent: corruption, kleptocracy, authoritarianism, state neglect; again, it also recalls the difficult experience of country dollarization, leading to a serious questioning of Bukele’s political wisdom.

What about the Bitcoin City? And the Volcano Bonds? The latter did get a lot of international attention, even among the seasoned financiers…

Bitcoin City, without a doubt, will precipitate land conflicts to clear the space to build it, and will lead to the expropriation of people’s lands. In a country that is as demographically stressed as El Salvador, this is inevitable. In fact, to little fanfare, Bukele’s government has already expanded the government’s eminent domain law, as if anticipating the need to forcibly acquire land for the project.

Deepening the country’s commitment to Bitcoin, Bukele proposed the use of geothermal energy plants to mine cryptocurrency. Using the “limitless energy” of the country's many volcanoes, he suggested expanding geothermal projects and tapping into this resource for the minting of Bitcoin, submitting volcano energy to verify transactions on the blockchain.

El Salvador already relies on geothermal energy for a small portion of its energy use, but still must import electricity from neighboring countries to fulfill its growing needs. As a part of Bukele’s proposal, he also announced Bitcoin City, a private community and logistics park, disconnected from all country laws to be exclusive to bitcoin dealings – an all-in-one special development zone and charter city. To fund this project and other state initiatives, Bukele has suggested the issuing of Bitcoin bonds powered by volcano energy, to gather the start-up capital to begin construction.


Cryptocurrencies have become extremely widespread in many Latin American countries. Could you give us an overview of some of the developments in the region, i.e. what is happening where? What is behind this sudden surge in popularity?

In Latin America, crypto has been around for at least 5 to 10 years. Generally, it has always traded digitally, but the more formal financial entities around it are a relatively recent phenomenon. In places like Panama that are deeply embedded in global financial markets, crypto exchanges – and “we accept Bitcoin'' signage – have been scattered across strip malls, retail plazas, and shopping centers for some time, especially in financial hubs like Panama City.

In other countries – where it continues to operate in a legal gray area – crypto circulates among enthusiasts and Internet speculators, even though national business sectors and politicians in the region are exploring ways to integrate it into existing economies, to create new revenue streams. The idea is to use cryptocurrency to resolve problems around national debt, inflation, unemployment, and wealth-creation (as in Paraguay, Mexico, Puerto Rico).

In Uruguay, crypto adoption is viewed as a key part to its tech sector innovation. Venezuela is also a very interesting case where a weak economy has spurred the use of crypto and propelled the state to launch a centralized cryptocurrency called the “Petro,” which is dependent on the extractive activity in the Orinoco Mining Arc. Many of these projects are the result of solvency crises, of economic stagnation, and of falling commodity prices for things like oil.

Are there any institutional entities pushing for the greater use of crypto at the moment?

It says something about the growing popularity of Bitcoin in the region that there now exists a dedicated Latin America Bitcoin Conference, which has been a yearly event since about 2013. It is promoted by Bitcoin Foundation Iberoamerica, an organization that brings together various national initiatives to push region-wide adoption and blockchain experimentation. Alongside these summits, national organizations teach people about crypto and blockchains, often enrolling them in specific services and wallet apps.

Under the guise of “not-for-profit” initiatives, these groups devise social projects, often with government support, to lead Bitcoin awareness campaigns. Financial evangelism of this type is common to Latin America, but the crypto-specific ones have accelerated in the last few years, following the same routes of micro-credit schemes before it.

Take Argentina’s 2018 “bitcoineta,” which was a bus tour that took crypto promoters across cities and towns all over the country to introduce people to Bitcoin and drum up excitement about adopting the technology to their lifestyles and businesses. The success of these campaigns is not yet visible, but for a region that remains one of the most unequal on the planet, the idea that crypto might be a way out of endemic poverty is rather appealing. This, at least, might be the case for the poor.

For others, from petty entrepreneurs to businesspeople, crypto is an enticing vehicle to accumulate and speculate; in general, crypto seems to have a lot of upside for investors accustomed to risk.

Are there some countries in the region that are pushing back?

We can take Bolivia as a counterpoint. It banned cryptocurrency for commercial exchange since 2014. The reasoning of the Bolivian state was that they needed to protect people from being taken for a ride in a Ponzi scheme; comparisons to gambling scams were drawn. In reality, though, the Bolivian state’s hit at crypto was an effort to stabilize the national currency, the boliviano. Proponents continue to argue for crypto’s expansion in Bolivia and the overturning of this law in order to “bank the unbanked” and bring more people into a more formal economy and away from the unregulated and informal marketplace where most Bolivians operate.

Observed from the outside, a paradoxical geopolitical dynamic seems to be at play in the region. On the one hand, many countries are primed to experiment with crypto due to the influence of earlier IMF-endorsed initiatives (e.g. the push to promote microfinance or to bank “the unbanked”). On the other hand, the very presence of Bitcoin now offers a promise of liberation from the dictates of the IMF, endowing crypto with the sort of populist appeal exploited by the likes of Nayib Bukele in El Salvador. What do you make of this dynamic?

Yes, this is quite paradoxical on the surface but is also expected to some degree as a schizophrenic neoliberalism has ravaged societies across Latin America. The IMF-imposed programs, recurrent structural adjustment, and debt servicing to which many countries in the region remain shackled, have limited the rate of development in many countries – leading to widespread frustration. In most cases, it has impoverished popular sectors and promoted further wealth concentration.

For crypto enthusiasts, entities like the IMF now stand-in for the ills of centralized finance, serving as proof that the global financial system is corrupt. But prior to crypto’s arrival, the IMF has historically stood-in as a boogeyman for the region alongside the US, representative of endless economic imperialism. For the crypto crowd, steeped in reactionary libertarian thinking that celebrates the necessity of easy economic exits, reinforcing this evil image of the IMF and other global financial institutions makes for a very persuasive tactic. It’s what allows them to push their peculiar gloss of freedom and sovereignty.

In Latin America, crypto and decentralized finance is peddled as a solution to a kind of wounded nationalism, dependency, and the stifling of national development. Placing blame on the IMF and global financial institutions is appropriate – as it is historically true – but it is also not the whole story. Opportunists like Bukele have always been in league with these entities too. In my view, cryptocurrency is Bukele’s approach to self-interested accumulation that, superficially, fits his populist slipperiness. It enables him to make arguments about national sovereignty and self-determination, while concealing the reality of self-serving profit extraction.


Elsewhere in the Global South, especially in the Pacific, we have seen the usual suspects of global development – from the US State Department to the World Bank to philanthropies – actually endorse the blockchain as a way of accelerating capitalist transformation, especially with regards to allocating property rights and handing out digital IDs to the population. Some scholars already speak of “blockchain imperialism,” and we are beginning to observe some weird alliances between US political power and various corporate players have emerged around, say, Ethereum. Do you see a similar dynamic in Latin America?

My concern is that, instead of strengthening institutionality and stamping out corruption, the solutions being offered aim to upgrade the government’s software, i.e. to improve interoperability, to have a better account of assets, transactions, and all sorts of other activities. But, of course, the social conflicts that create these disputes over territory and resources are not being addressed by these very governments.

In some cases, such as in El Salvador, democratic-institution building is being abandoned entirely. Here, blockchain is a tech-fix for authenticating land ownership and use, productivity, etc., as if this could magically create more trust and equality in the relations of exploitation. It is also being touted as a way to create a more efficient government that can spend its time governing rather than remain mired in bureaucratic procedure and decorum.

By using blockchain technology to ensure the integrity of hard assets like land, the usual suspects – the World Bank, the US State Department, and so on – are doing little to address questions of land reform and inequality. Rather, they are adding a software layer of “stability,” of great use to investors and speculators as it generates verifiable data via the blockchain.

Rather than being liberatory or empowering, this is a way of sorting people (and their assets) as deserving or undeserving, as worthy, or worthless. These so-called digital inclusion efforts are, in my view, about opening new spaces up for capital, and to prepare these terrains for the future, still unknown kinds of exploitation.

The digital ID aspect is less developed in Latin America. However, one can see that, at least in El Salvador, the enrollment of citizens into the Chivo Wallet might be seen as a state-operated data-gathering effort to harvest information and habits on Salvadorans by what is an increasingly authoritarian state.

Are we, perhaps, being too critical of (at least nominally) anti-systemic efforts of someone like Bukele and ignore the other side of the story, that of “blockchain imperialism”?  You have written of “fiduciary colonialism” underway in the region, whereby the lives of the everyday people would now be inserted into the global crypto bubble. Is there a way to relate the two concepts in a fruitful way? Are they just two sides of the same phenomenon, only that, in some cases, the governments endorsing this are on good terms with the US and, in other cases, they are not?

Salvadorans never had a say on the matter, yet due to the recently passed law, their businesses were forced to accept Bitcoin, learn all the technology on-the-fly, and have their public funds transformed into crypto assets for the state to speculate on. In my view, there is nothing anti-systemic about Bukele’s approach to crypto adoption, especially when it is shrouded in operational secrecy through the privately held Chivo company...

If we concede that Bukele’s move is nominally anti-systemic, it is just a side-effect of the techno-solutionist discourse. From this perspective, crypto in El Salvador follows the pattern of usual state-business relations in the region; so far, it resembles a self-enrichment ploy by Bukele and his close allies – most likely, they were already holding Bitcoin even before state-led bitcoinisation was even imagined.

If in the past we had presidents, military, and capitalists collude to reap economic benefit and share in the spoils of exploitation, Bitcoin is something eerily similar, an alliance between national techno-capitalists and Silicon Valley entrepreneurs in a mutually beneficial but risky enterprise from which the ordinary Salvadorans benefit little. I refer to it as “fiduciary colonialism” in the sense that country tax law, legal-tender laws, and economic development is being reoriented for a single purpose: Bitcoin.

For Salvadorans, questions of access to water and food, of dignity, of social reproduction are far more important measures of well-being than the peaks and dips of crypto. However, as protests continue to make clear, these popular struggles are today being sidelined to privilege the one true value: cryptocurrency assets.

Bitcoin predation in El Salvador, as presently proposed, is also poised to transform labor relations. Should Bitcoin become generalized and scaled in the way that Bukele hopes, people will be tasked to provide services to the Bitcoin community itself and transact in crypto for basic household income. They will be working for Bitcoin businesspeople who enjoy the financial freedom to accumulate unencumbered, while Salvadorans would be once again forced to sweep, clean, and serve for a few paltry satoshis, which, in the end, they are advised not to spend, but rather stack and hodl. In this sense, “blockchain imperialism” is underpinned by a new theory of underdevelopment, where new relations of dependency are being forged.

"Blockchain imperialism" remains a useful concept to understand the direction of technological solutionism for social and economic problems in the rest of the world.

Iceland, with its own Bitcoin-mining volcanoes, is often mentioned as a success story, which El Salvador should emulate. You have written of both the shortcomings of the Icelandic model and also of the likely costs – to be borne by the local populations surrounding the geothermal power plants – that are rarely brought up by the advocates of the project. Why isn’t the Icelandic model so easy to follow in El Salvador?

Compared to El Salvador, Iceland is a different world entirely. On the surface, the economic reality of its inhabitants is wildly dissimilar. Just glance over each country’s Gini coefficient to get a sense of how they are doing in terms of inequality. Fundamentally, they are societies structured by different historical forces; El Salvador is saturated with postcolonial and postwar residues whereas Iceland has generally existed on the peripheries of European problems, following an uninterrupted and stable model of development.

The energy surpluses that Iceland enjoys today, those that enticed many crypto firms to set up shop on the island, are the result of planned and deliberate investment into long-term national energy infrastructure. In El Salvador, energy infrastructure development has stagnated for decades, not because it is not needed, but because there has never been an incentive to do so properly.

Look at the Salvadoran communities that border the Berlin Geothermal Field, where the first volcanic Bitcoin was minted. The families there continue to have intermittent electricity access and experience routine water shortages, running water for only certain hours of the day. Some still have to use candlelight to supplement the lack of energy, as well as run generators to keep the lights on at night.


Some foreign commentators have voiced concerns that El Salvador might turn into a state that works like a Ponzi pyramid. We have also seen reports about foreign investors presenting a project of private cities, governed by contracts and managed by a company. Where do you see such efforts leading to, especially as they now also begin to attract the attention of mainstream players in the development sector?

I am very wary of these kinds of projects as they are basically creating enclave economies across the region. They are creating walled gardens of prosperity that reproduce and exacerbate local inequalities, creating tributary communities around them that are coaxed into working for the enclave. In Central America, specifically, we’ve seen this in the banana enclave economies of the 20th century that led to much modernization by investment, to the Panama Canal Zone. There are many historical instances where this kind of project-led investment leads to economic apartheid between those who accumulate capital through these endeavors and those who are tasked to labor, often cheaply and without protections, for it.

One thing that stands out about Bukele is his deft use of populist rhetoric. But it’s a very peculiar type of populism, which seeks to enroll the forces of hyper-capitalism – hence his visit to the big Bitcoin gathering in Miami – to tame the old capitalism inherited from the previous eras. Is it a genuinely new phenomenon in the region?

In El Salvador, populism is not new, it has a long tradition in the country. To me, it actually recasts the same forms of political allegiances, class and racial cleavages, and weaponizes them under discourses of nationalism and empty patriotism. The seduction of elites, old and new, by the thrills of financial experimentation and emerging instruments of accumulation is also rather common. Indeed, this is a new phase of capitalism’s entrenchment in the underdeveloped world, but in terms of elite economic habits it is rather continuous with what came before.

Financial elites will always frolic to emergent avenues that generate profit, often ruthlessly, and using whatever justifying mechanism in their toolkit. If today Bukele moves under the guise of novelty and innovation, below this thin cloak is the same right-wing populism that has animated conservative governments past. He’s simply using the tools of the day. One of Bukele’s first trips as president was to the conservative Heritage Foundation in Washington D.C., vowing to deliver an El Salvador ripe for investment.

We have seen Venezuela and Ecuador, under Chavez and Correa, also flirt with techno-populism, albeit from the left; it’s hard to imagine them going to the Heritage Foundation. Could we compare the two with what is going on in El Salvador right now?

Compared to Correa and Chavez, who both welcomed software and technological innovation as a means of empowerment and economic productivity, there is a different ideological objective.

For Correa, if I recall correctly, the knowledge city – Yachay – was a university, a place that sought to improve higher education in Ecuador – and it succeeded as it has remained a leading research institution in Ecuador. Yachay imagined itself as boosting the technology sector, too, but it was something more in-line with Panama City’s “City of Knowledge” that houses universities, NGOs, and other entities in the service of culture and society rather than a project as single-minded as Bitcoin City which is singularly driven by the profit motive.

These initiatives were about skilling up their populations and to make them competitive in an increasingly technological global marketplace. In the Venezuelan case specifically, it mostly worked. A whole generation of Venezuelans became developers and talented programmers, but then left the country to work elsewhere due to stagnating wages and a crisis of the oil-dependent development model. Lots of Venezuelans work in the Argentine and Uruguayan tech sector, as well as Chile and elsewhere.

Bitcoin City is nothing like this, as it does not imagine itself to be anything but a logistics hub for Bitcoin economic activity, a processing hub with a resort-like atmosphere for Bitcoiners to enjoy. Everything else that pertains to incubating technological minds and innovation is relegated to an afterthought.


Back in the early 2000s, when Ecuador and El Salvador abandoned their national currencies and opted for the dollar, this triggered many negative effects, including hyperinflation. What kind of consequences could one expect from Bitcoinization? Could Bitcoin replace the dollar any time soon?

I don’t think that Bitcoin will supplant the dollar anytime soon. In fact, I think Bitcoin adoption will reach a peak in El Salvador and fizzle out before the dollar goes away. Salvadoran social habits are very wedded to the dollar; as a common measure of value, the dollar remains unrivaled.

The technological complexity of Bitcoin and various blockchain technologies that are improving and iterating on the initial concept doesn't help. The emergence of altcoins, Ethereum, Bitcoin Cash, Litecoin, etc., also generates confusion among people who are trying to figure out what this whole thing is about.

Regular people are not looking for an economic exit out of centralized banking arrangements. This privileged view is totally detached from the reality of poor people who are worried about their next meal, if they have the bus fare to make it home, if their kids made it home from school safely.

The exclusive focus on bitcoinization runs the risk of obscuring these elements that are essential for social reproduction, privileging financial abstraction over the reality of survival.

The notion that what Salvadoran people need is to be liberated from the current financial infrastructure – and to do so by means of Bitcoin trading – is only possible if one completely mischaracterizes or misunderstands local social relations, succumbing to some kind of amnesia.

Could one explanation for Bukele’s flirtation with Bitcoin simply be that he is trying to gain some leverage when negotiating the much-needed $1.3 billion loan from the IMF? Now that China’s ambitions in Latin America have shrunk somewhat, Bitcoin might be offering some kind of a replacement: if, in the past, populist governments in the region would tout their contacts with Beijing as a way of getting Washington to pay attention, now they simply start flirting with crypto...

This is an interesting point, and I think there’s much more to unpack here. First, I don’t really think that China is abandoning its ambitions in Latin America, but rather expanding them quietly. The turn to Bitcoin in places like El Salvador likely signals to the Chinese that there are new economic maneuvers possible in the region where they stand to benefit. As early as December 2019, Bukele toured East Asia and stopped in China to meet with leaders there. Shortly after this meeting, there were agreements made for Chinese-funded ports and transportation infrastructure in El Salvador.

I agree that crypto is part of this larger geopolitical conversation on U.S.-El Salvador relations, and the disputes over who stands to benefit from the development of the country. This is why, in my view, Bukele is moving so quickly with the Volcano Bonds – he needs to have a fallback option should El Salvador’s $1.3 billion loan request be denied by the IMF. As Bitcoin’s value is unpredictable, it is really hard to tell if this will pan out the way that Bukele imagines it, but it is causing some significant rifts, not just at the level of geopolitics but also in terms of his relations with the country's own capitalist class.

In your critiques of Bukele’s Bitcoin strategy, you have used terms like “technological apartheid.” One might counter that, because of the way the current financial system works, there’s already a fair amount of “financial apartheid” going on with the payment and remittance systems eating up huge commissions on payments from abroad and other financial services. How does one counter such critiques?

My deploying the term technological apartheid sought to characterize the preexisting material conditions of technology use and Internet penetration in El Salvador. For a country with unequal cabled Internet access, patchy cellular data connectivity, and a weak energy grid, and where financial inequality is already an insurmountable problem, technology makes these inequities more acute rather than bridging the gap or creating opportunities for inclusion. Any talk of technological solutionism or “finnovation” is empty when these are the preexisting conditions of country living.

Still, do you see any space of outmaneuvering Bukele from the left side of the spectrum, perhaps, with a more sophisticated technological approach that would not leverage crypto but would nonetheless still see dollarization and Wall Street institutions as problems that need solving? Isn’t there a big risk that, by lumping what might be sensible projects in a dollarized economy – e.g. the Chivo wallet – with the Bitcoin propaganda – the Bukele government might be shutting off the possibility of truly emancipatory uses of technology for autonomous economic development, finally free from the imperatives of “dollar diplomacy”?

The argument from El Salvador's left, the one about economic imperialism and Washington meddling, has been captured by the Bukele administration. The idea that “left tech” is a possibility in El Salvador is quite fascinating, and it would need to be incubated further amongst social organizations. But again, what is immediate and urgent to Salvadorans are questions about food, water, human rights, and justice.

No sincere conversation about "left tech" or outmaneuvering Bukele’s Bitcoin is possible when the definitions of what counts as "valuable" between the administration and the people is so wildly dissimilar and out of sync. Perhaps it is here where social movements might begin to develop a popular notion of value more explicitly, to contest Bitcoin accelerationism, and to, in some cases, dissociate technology’s empowerment from its hypercapitalist application.

For any social movement to successfully push back against foreigner-first Bitcoin-led development as per the Bukele agenda, they would have to educate, teach, instruct, workshop, and build with communities on the uses and abuses of cryptocurrency, explore blockchain as a technology that might translate into social movement strategy, while historicizing Bitcoin as a hypercapitalistic invention born from “neoreactionary” financial minds.

Conscientization around blockchain might help communities gain financial literacy and leverage the technology for egalitarian uses; it would also blunt the effects of crypto proselytizing. Knowledge of the cryptocurrency world and its main players will help communities to oppose Bukele's agenda in a more programmatic fashion.

In El Salvador, Bukele’s brash rule has prevented a neutral assessment of cryptocurrency as an instrument that can exist outside of right-wing, authoritarian, and foreigner-first politics. For Salvadorans, it is not about what Bitcoin is but rather about what Bitcoin does – and so far, it has not delivered on any of its lavish promises.

What has it done? Well, it has disrupted communities, placed groups in a collision course with Bitcoin-development, increased surveillance on all activism and protest critical of Bitcoin and Bukele, curbed free speech, and gambled public money all the while many necessary social projects in education, pensions, health, and natural resources remain paralyzed and deferred.

Jorge E. Cuéllar is an interdisciplinary scholar and Assistant Professor of Latin American, Latinx & Caribbean Studies at Dartmouth College where he teaches courses in Central American Studies, global capitalism, and migration. Originally from El Salvador, his work focuses on the contemporary politics and culture of modern Central America. Cuéllar is currently preparing his first book project, Everyday Life and Everyday Death in El Salvador. His public writing can be found in NACLA, New Left Review’s Sidecar, El Faro, and The Abusable Past, among others. He tweets @infrapolitics.