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Vice President Ulloa’s Insight on Bitcoin Adoption
- Vice President Félix Ulloa reveals El Salvador’s plan to phase out the dollar for greater economic independence.
- Bukele’s government sees bitcoin as a tool to achieve financial autonomy, moving away from traditional fiat currencies.
The vice president of El Salvador Félix Ulloa, in a recent interview with The Russian media RT, have released economic reform plans that could significantly reshape the nation’s financial landscape. During his visit to the St. Petersburg International Economic Forum, Ulloa revealed President Nayib Bukele’s intention to abandon the use of the US dollar, aiming for greater economic independence.
The transfer to abandon the dollar This is nothing new in Salvadoran politics. It has been 23 years since El Salvador adopted the US dollar along with the local currency, the colón, finally transitioning to a fullydollarized economy.
We want economic and financial liberalization, especially in terms of central banks, independence of fiat currencies, including the dollar, the euro, the pound, all the fiat currencies. That’s why Bitcoin became an option. – Felix Ulloa, Vice President of El Salvador.
Over the years, several administrations have thought about reversing this policy. President Bukele’s approach, however, suggests a direction towards the use of digital currencies, specifically bitcoinas a means to achieve such financial autonomy.
According to Ulloa, the government has repeatedly considered the implications of reintroducing the colón or adopting other fiat currencies. The analysis concludes that such initiatives would be economically disadvantageous, especially in the short term. Therefore, the administration is focusing on bitcoin as a decentralized option that does not rely on central bank policies.
This strategy is in line with global trends in which nations seek alternatives to dominant reserve currencies. Russia, for example, is pushing for de-dollarization in response to Western sanctions. The country has increased its trade with China using local currencies, the yuan and the ruble, and is also exploring digital currencies to bypass the dollar.
Despite the apparent benefits, the transition to bitcoin presents its challenges. El Salvador’s pioneering Bitcoin law, enacted in mid-2021, marked a significant step towards this goal. However, cryptocurrency adoption has faced practical and financial hurdles within the country. Global and local skepticism about the stability and viability of bitcoin as a national currency highlights the complexity of such a drastic monetary change.
Furthermore, Ulloa’s comments come at a time when geopolitical tensions and economic uncertainties are high. Its openness to de-dollarization in Russia, a nation that advocates reducing global dependence on the dollar, highlights the strategic nature of El Salvador’s economic maneuvers.
The country’s abandonment of the dollar, once deemed “catastrophic” by former Finance Minister Alejandro Zelaya, is now being viewed through a different lens. The current administration sees bitcoin not only as a financial instrument but also as a potential one economic redefinition independence.
Whether this will lead to a sustainable financial model or further economic challenges remains a crucial question for both policymakers and international observers.