From the moment the law was announced on June 5, 2021, until August 31 of last year, I devoted myself to pointing out all the contradictions in the Bitcoin law. I guess the government didn’t like that, and they used this arbitrary arrest as a form of intimidation.

There was no warrant. They came to pick me up at my house early in the morning. I was taking my mom to work, and these agents showed up armed with assault rifles and in camouflage uniforms. With the excuse that there was some issue with my car, they arrested me and took me to the station. Fortunately, I was able to communicate with different groups and associations that I had contact with through my work in technology, and they got the word out.

They held me all morning without explaining the reason for my arrest, without explaining if I was charged with anything. They didn’t let me speak to my lawyers. Finally, they take my cell phones without a warrant, saying they need them because they’re investigating something. That’s when I say, Well, if you’re investigating something, that means there’s a case or something against me. Even then, they don’t respond, they just say they’re taking my phones and that they’re going to let me go.

I want to emphasize this, because people say, “Ok, yeah, they let you go,” but it doesn’t end there. They sneaked me out because the press had found out and they were all outside of the station where I was being held — first the police station, then the Central Investigations Headquarters, which is where all the specialized police investigative units are. I heard them say, “We’re going to take him in an unmarked car, so that the press doesn’t see.” That’s not normal.

I think a lot of people don’t understand how serious this is, because normally when the police arrest you and they’re just doing some investigation, they finish up their procedure, and they let you go. You figure out how you get home. They’re not a taxi service. Worse, instead of taking you in the patrol car, they tell you they’re taking you in an unmarked car, with the specific objective of the press not seeing you.

What do you imagine then? You imagine that they could do anything to you — they could disappear you, they could throw you in jail, they could even kill you. It’s absolutely not normal, and I think it’s the most serious part of this case.

In the end, I think it was thanks to popular pressure — something that hadn’t been seen in a long time — that they let me go, they took me home. They took photos of the cars and the neighbors who showed up, and they left. After that, I spoke with the lawyers. We evaluated the situation, we saw what was happening in the country, and we realized that if this happened again, they weren’t going to let me go.

We’re seeing it now with the state of exception: they’re arresting people without due process. When they arrested me, they still didn’t have all the judges, they hadn’t replaced the prosecutors, and there was still some kind of institutionality. Obviously, at this point, that no longer exists. We came to the conclusion that if I wanted to keep speaking out about what was happening in the country, not just with regards to Bitcoin but also the broader degradation of human rights, the safest thing was to do so outside of the country.

I came to the United States for two reasons. First, because my idea was to keep speaking out about Bitcoin, and obviously the United States is one of the countries that is most pushing the issue. Most of the companies and the influencers are here. And second, because the largest population of Salvadorans abroad is here.

Right now, we’re in the process of requesting asylum. I had the privilege of having family and others who would help me out, as well as the legal means to migrate here, which is something that most people who are attacked by the government or by organized crime don’t have, and unfortunately that’s the story of most people who emigrate to these countries.

I always talk about three contradictions with respect to Bitcoin in El Salvador. First, the contradiction of Bitcoin as money. I always clarify that I’m not a crypto promoter, because my ideology won’t let me believe — at least not like the promotors do — that, by itself, a monetary system will solve all the problems derived from the functioning of the capitalist system itself. I don’t believe that. But what the bitcoiners propose is that this currency was born after the 2008 subprime crisis as an alternative monetary system that, in theory, is resistant to state intervention, which, according to its proponents, is the fundamental reason why economies fail.

That’s the first contradiction. If your idea is to have a currency without state interference, why would you want a state to be promoting the use of this coin, and worse, including these mandatory clauses in the law that go completely against the bitcoiners’ libertarian philosophy and lifestyle?

The second contradiction has to do with the autonomy that the Bitcoin fanatics promote: that you’re “sovereign” with respect to this money. That is to say that there are no intermediaries that allow you to interact with it or with other actors in the system. The problem is that the government, instead of promoting other technologies and other electronic-wallet providers, decided to implement its own electronic wallet and its own crypto exchange system. If the idea is that people are sovereign, you shouldn’t ask them to use a particular wallet. The government gave itself the obligation to offer a medium of exchange between bitcoin and dollars and to educate the public. They only did the half, the creation of an exchange mechanism, but instead of educating people about the technology, they invested a ton of publicity and resources into selling the idea that Bitcoin is the Chivo Wallet [El Salvador’s official crypto wallet].

The third contradiction has to do with the issue of adoption. A lot of people talk about how it should be promoted and adopted by the people, that there should be no kind of interference. In this case, we’re seeing a state that is essentially promoting a private monopoly with public funds. If we’re saying that this wallet supposedly has 4 million users, according to the president, that means that it’s establishing a monopoly and it’s not allowing for an organic adoption, it doesn’t allow for competition, it doesn’t allow for a real use case.

I think that the fundamental problem here is that the idea of using cryptocurrency as money was disregarded a long time ago. In the case of Bitcoin, ever since the first big speculative bubble in 2013, people realized that it didn’t work very well as a medium of exchange because of its price fluctuations. So they started to use it more as a vehicle for speculation. People bought cryptocurrency, bitcoin, with the hope that one day the price would rise, and they could sell it and obtain profit from pure speculation. The case of cryptocurrency in general has been pure speculation over the last decade.

It’s an interesting question. One of the premises of Bitcoin and cryptocurrency in general is that they are more transparent than other financial mechanisms. In fact, one of the selling points is that all the transactions are public. They’re all registered on the blockchain; they can all be audited by the public and verified. What’s happening with the bitcoin purchases in El Salvador is that the only proof of purchase is the president’s tweets and a low-resolution screenshot of a purchase from late last year.

It’s a little contradictory, because all the platforms for buying and selling cryptocurrency, from the simplest to the most complex, allow you to see your account balance — if you made a purchase, how much you’ve lost or how much you’ve gained, and the value of the prices. From any platform, you can easily get a statement just like a bank statement and say, “OK, you don’t believe that I’ve been buying? This is the platform, these are the purchases, this is the balance, this is how the investment is performing.” In the case of the bitcoin purchases that the president claims to have made, there’s no trustworthy evidence. A tweet does not count as proof of purchase.

It gets worse when we start to contrast other numbers. Supposedly there’s $150 million in the government trust that allegedly is exclusively for converting bitcoin to dollars on the Chivo Wallet platform. This doesn’t fit when we start to look at how much bitcoin they had to have given the population initially, how much they had to have spent on the budget, how much they’ve spent on the alleged bitcoin purchases, and, above all, the supposed profits that the government says it is using to promote projects like the Chivo Pets animal hospital, which is state-subsidized.

So the question one asks is how, in a downward market, the government can be reporting profits on bitcoin purchases, at the same time that the president says that he hasn’t sold any bitcoin, and at the same time that they say they’re using the trust? When you try and square the numbers, something has to be untrue, and the only thing that we can’t measure at all are the alleged purchases that the president says he’s made.

My bet is that they’re not real.

We also have to look at when they happen. If we had to evaluate the president’s performance as an investor, it would be a terrible performance. Every time he announces that he’s bought bitcoin, the price goes down — it’s been a rule. It looks more like a favor that he’s doing for whoever is sponsoring him, saying that he’s bought bitcoin in order to generate FOMO, so that people think they’re missing this opportunity to invest and pull themselves out of a situation of poverty or insufficient income.

I maintain that the purchases are fake. It would be so easy to refute the argument that they’re fake with those account balances. We don’t have any of that. We’ve seen how the president is. If someone says something false, he comes right out to refute it. We’ve even seen journalists lose their jobs because they retweeted or commented on a photo that turned out to be fake news, and he immediately comes out to refute it. Why, in the case of Bitcoin, hasn’t he shown any evidence to the contrary? I really feel that the purchases aren’t real, and we’re going to find out one day when we can see those account statements. When will that be? I don’t know, but I hope that someday we can figure it out.

I think that the bonds were more of an initiative to secure additional liquidity for the government. It looks like it hasn’t gone the way they hoped. At the end of the day, if you’re a big investor — what we call “whales,” or those who have a lot of capital, be it in cryptocurrency or in money — your interest, if you’re going to make a loan to whoever, is to recoup that investment. I think what’s been happening with the government in the last few months has deteriorated that confidence, even among the crypto platforms.

The idea with the bonds was that they’d be more accessible than traditional bonds. The price is pretty low, only $100 per bond, and with no minimum purchase, against other bonds that ask you for at least $10,000 or whatever. I imagine that the original plan was to commercialize them through the crypto exchange platforms.

But that means that the platform would have to risk its capital in buying these bonds in order to later sell them to retailers. Crypto platforms have much better knowledge of how the market will go, because they can see internally how the transactions are going and do their analytics — they have privileged information that outsiders don’t have.

I image that with all this, together with everything that’s happening in the world — the issue of inflation, the markets, the possibility of a recession — they realized that it wasn’t a good investment, and that’s making the volcano bonds difficult to position. I imagine that the sponsors no longer saw it as the good investment that it seemed like late last year, when the price still wasn’t so bad.

June 13 was pretty rough for the market in general, but for crypto in particular. We’ve seen how bitcoin has fallen to a point that’s putting the squeeze on several big companies that had invested a lot there. We’re already seeing signs that some big platforms, like Celsius, which specializes in crypto loans, isn’t going to last much longer before it becomes insolvent.

All these factors make it increasingly difficult to promote something like the volcano bonds. Even though I don’t agree with the bonds or with what they hoped to do with them, I think they would have been more successful if they had been launched last year, because there would have been a chance of selling them. At this point, it looks increasingly difficult, and if the market continues downward, I think we’re never going to see the volcano bonds.

If we go further, it’s important to see who is behind all this. We have, especially, Tether, which provides liquidity to practically the entire crypto ecosystem. At least in terms of market volume, they’re the biggest provider of liquidity, with those digital tokens that have the value of a dollar: the famous Tethers. There’s a whole collection of companies — Bitfinex, Blockstream, iFinex — that are trying to generate this type of product, not just in El Salvador but all over the world.

It could be that El Salvador and the volcano bonds are part of a broader global strategy by these companies to grab onto small states that can adopt these experimental financial mechanisms, which are highly speculative, in order to generate pressure on more developed and larger countries. It’s easier to convince a small country that doesn’t have much to offer in terms of industry to adopt crypto because it makes it look like an innovator, a country at the vanguard of technological advances. This generates pressure on developed countries, because it allows these countries to say — I don’t like to use these words, but this is how they sell it — “How is it possible that a third-world country is innovating financially, while we here in developed countries aren’t adopting these instruments? We’re leaving the poorest people out of this more equitable financial system!”

It serves them as a lobbying tool. We’ve seen recently how someone analyzed how, in the United States, the crypto industry is putting more money into lobbying than the defense contractors. I wouldn’t be surprised if El Salvador has been the petri dish, with the government’s openness to experimenting with cryptocurrency, in order to have them in a portfolio of implementations around the world to push legislation that’s favorable to the industry.

The thing is, the industry is collapsing right now. We’ll see if all that lobbying money has an effect. It might, but no matter how much legislation is approved, if the project isn’t sustainable, it’s still going to fail like we’ve seen with Bitcoin implementation in El Salvador.

I don’t think that Bitcoin itself has been the main objective of these laws. Instead, the goal behind all this was the implementation of synthetic dollars, these digital coins that have the value of a dollar that the government could use as a means of issuing its own currency. In that, they have been successful.

If we look at the study by the US National Bureau of Economic Research, they found that it’s the dollars in the Chivo Wallet that have the highest value transactions. That is to say that the people who use the Chivo Wallet are using it to send dollars to each other. What’s interesting is that the company behind its development, in the documents that they had to fill out in order to be listed on the stock exchange, explains that the way the Chivo Wallet works is that it’s not dollars that circulate within it but rather digital tokens.

This is in line with what other investigations have revealed. For example, [the Salvadoran investigative news outlet] El Faro was able to get access to some videoconferences with crypto providers where the Bukele brothers stated that they wanted to issue their own digital currency. What’s happened in the Chivo Wallet is that these synthetic dollars are circulating. At some point, the government could try to deploy a mechanism similar to these synthetic dollars, backed by debt or who knows what, in order to try to cover some of its internal finances.

I don’t like to do too much economic analysis because it’s not my field; my field is more the technical side. But most economists say that the government will do everything not to default, because of the political cost this would have ahead of the 2024 elections. Why? Because whatever happens with the elections, they need the support of the population to legitimate them. Default would be a terrible blow to the government, no matter how high their approval ratings may be right now.

Most economists suggest that they’re going to do the impossible to try and pay, and that could mean accessing what little liquidity remains in the pension funds or the banks. I agree with this reading, and I imagine that when the time comes that the accounts don’t square, they’ll try to use all of these mechanisms: issue more synthetic dollars, maybe via the Chivo Wallet, or make use of the liquidity that they have in the banks and pensions, in order to pay.

With regard to Bitcoin in particular, I think that most people are disenchanted. Whether you’re for or against it, I think everyone agrees that the way it was implemented, all it achieved is that no one wants to hear anything about Bitcoin. Now that the market is down, I think people are even more frustrated with it. We’ll have to see how the government reacts. I joked on Twitter just now that we’ll see if the president doesn’t come out again and say he’s bought more bitcoin. In the end, the industry runs on convincing the small fish to buy, when in the end it’s intermediaries like the exchanges and people with a large quantity of capital who really make money off cryptocurrency.

Bitcoin was the president’s first big political mistake. The majority of the population didn’t agree with how it was implemented, because it brought back a lot of memories. Everyone heard bitcoin and remembered dollarization — the way it was pushed through in a late-night legislative session, which was supposed to be a thing of the past.

My arbitrary arrest was just the precursor to everything that’s happening now under the state of exception. What they did to me is what they’re doing to thousands of people, only now people have even fewer tools to defend themselves and fewer resources to avoid ending up in prison over an unfounded accusation.

In the end, Bitcoin has just been the first clear expression of the Bukele clan’s authoritarian government, because at the end of the day this dictatorship belongs to the Bukele clan. They decide what happens and what doesn’t in the country. The situation is only getting worse.