The expenditure is $ 33 million more than reported by the Executive, experts estimate. The government has not detailed costs of booths, ATMs, nor of salaries of advisers and promoters.
The adoption of Bitcoin as a legal tender, imposed by the government of Nayib Bukele, will cost Salvadorans at least $ 238,336,910, according to official data and estimates based on market prices or sources consulted.
Officially the known figure is $ 205.3 million, according to the decree that the Ministry of Finance presented to the Assembly, the sum was approved on August 31.
This money was transferred to the 2021 General Budget from a loan from the Central American Bank for Economic Integration (CABEI) and has been distributed as follows: $ 150 million for the trust that will be managed by Bandesal (Development Bank of El Salvador) for convert bitcoins to dollars and vice versa.
Another $ 30 million is for the $ 30 bonus to each person who downloads the Chivo app on their mobile to trade bitcoins; $ 23,300,000 for the “Criptofriendly” project, which is supposed to cover the costs of Chivo’s booths and ATMs, but there is no official information; and then allocated $ 2 million to the General Superintendency of Electricity and Telecommunications (Siget) to acquire technology.
The Salvadorans’ interest in the Boc kiosks was to get the $ 30 in cash
On the Chivo huts, the government has only said they are 50, but has not detailed the construction costs, so some architects have made estimates of what each kiosk can cost.
Architect Carlos Fulla made a calculation he posted on his Twitter account, based on his experience budgeting materials, labor costs and measurements, indicating that building a basic booth could cost $ 4,513.20. Taking this cost as a reference and multiplying it by the 50 huts results in an expense of $ 225,660.
But the expert made an estimate for the case of more complete huts that, as he describes, have an exterior lobby and sliding glass doors, some even have a polycarbonate roof supported in metal structure, which raises the cost $ 8,961.09.
And as it has no data on how many kiosks have these features nationwide, the estimate is made at the cost of a more basic booth that the architect makes.
There is no official data on the payment of advisors deployed in newsstands to provide information on how to download the application and conduct transactions with bitcoins, or of the promoters who go from house to house to promote the use of the application.
In view of this, El Diari d’Avui asked during a tour some employees who agreed to talk, but on condition of anonymity, about the salary they are being paid.
An agent of the company Chivo explained that they had trained about 250 people as advisers, who will be paid the minimum wage, ie $ 365, but that there were others who will receive $ 225 fortnightly.
However, the worker did not specify how many will be paid one salary or another. Therefore, if the current minimum wage for 250 employees is taken as a reference, the expense would be $ 91,250 in a month.
The government has not clarified how long these people will be hired, but the young man who was consulted said they have been hired indefinitely.
There are also people who have been employed as promoters. According to the digital newspaper El Far, the government has hired 4,000 promoters, who will work from house to house so that people can download the Chivo wallet application on their mobile phones.
“The 4,000 promoters will receive $ 36 a day to go from house to house teaching how to use the wallet. The goal is that every day 10 people download the app for each promoter and for each person you download it the promoters will receive a $ 5 bonus, ”said one person who has been closely acquainted with the coordination process for training trainers and promoters, says the El Far publication.
To the above expenses is added the purchase of 550 bitcoins made by the government with public funds.
President Nayib Bukele announced on the afternoon of September 6, a day before the entry into force of the Bitcoin Act, the purchase of the first 400 Bitcoin which, according to the value of the cryptocurrency at the time of the announcement, spending was $ 20.6 million.
Then on Tuesday, September 7, Bukele announced in the morning another purchase of 150 bitcoins, the expense amounted to $ 7,800,000, according to the value of the cryptocurrency at the time of the announcement. That adds up to $ 28.4 million in Bitcoin purchases.
Therefore, the disbursement made by the Bukele administration only for the start of the Bitcoin Law, using money from the Salvadorans, would amount to just over $ 238.3 million. It is necessary to add up the monthly operating costs of ATMs, kiosks and payment of employees, among other expenses that have not been detailed.
Economist Ricardo Castaneda, of the Institute of Fiscal Studies (Icefi), stressed that they had already warned of all the expense that the implementation of Bitcoin would entail for the country’s finances.
“My phone is old, I couldn’t do anything,” interested in using Bitcoin didn’t have proper cell phones
“We had already warned that the costs of adopting this whole process would be borne by the population … it means that even if people decide not to use Bitcoin already with the taxes that people pay, if they go to assume the cost of this whole process, ”he noted.
In the latest poll conducted by the University Institute of Public Opinion at the UCA, Salvadorans expressed not only their rejection of Bitcoin, but their disagreement with the spending of public money on the Bukele project.
“Six out of ten Salvadorans disagree or strongly disagree with the government’s decision to spend public money to use Bitcoin in El Salvador and eight out of ten Salvadorans have little or no interest in downloading and using the Chivo e-wallet.” reveal the survey.
The lack of interest of people to use the cryptocurrency and the virtual wallet was reflected this September 7 and this was added to the failures to download the wallet Chivo and to make transactions at ATMs. And the people who approached just wanted to use the $ 30 of the voucher.
How much did the government pay to develop the Chivo wallet?
Another piece of information that the government has not revealed is which company it hired to develop the Chivo virtual wallet.
Castaneda questioned that there is no transparency about the company behind the Chivo wallet.
“No tender was made, the process of the procurement law was not followed, the amount being paid to this company is not known and therefore it is observed that of previous governments which is the use of the “State for the benefit of a few, that is, all power is used in the state simply to benefit one or another company and this in concrete words is called corruption,” he noted.
The economist added that the population should not lose sight of the fact that these are public resources, ie people’s money. “We are talking about public resources and when we talk about public resources it means that government authorities have to follow the processes set out in the country’s legal framework,” he stated.
He also said that he must not lose sight of the fact that Bitcoin is a high-risk cryptocurrency.
“Bictoin is considered a high-risk cryptocurrency, meaning that if someone is thinking of it as an investment instrument and knowing how it works in the market could make a profit, the point is when you turn it into a currency. legal and this is where the country has taken a leap into the void without a parachute and without experts to allow it to accompany it, ”he pointed out.
He also stressed that three months after the adoption of the Bitcoin Law, the benefits for the country are not known.
“Today there is not a single technical study that allows you to show what the benefits of the Bitcoin Law are for the country, it is also not clear what is being sought to resolve. When a public policy is developed one of the key elements is to ask yourself what you want to solve? and what are the alternatives you have and if they can really work, “Castaneda said.
Economist Luis Membreño warned that the future of this cryptocurrency is uncertain. “It depends on the government, if the government lets it die, it stayed here and the government will have invested (public money) several hundred million dollars that will be lost and we will have parks with booths and 200 ATMs doing very little and it will be something for the story in the world of how the Savior failed to implement a cryptoactive of national circulation, “he opined.