Economic freedom or crypto-colonialism? Materialities of Bitcoin adoption in El Salvador

Abstract

On September 7th, 2021, El Salvador became the first nation in the world to adopt Bitcoin as legal tender, opening up its rapidly developing coast to a new form of crypto tourism and investment. Given the potential access it provides to those outside the traditional banking system, Bitcoin proponents – most notably Salvadoran President Nayib Bukele – have touted the ability of Bitcoin to promote “economic freedom,” poverty alleviation, and development in the country. In the rural coastal community of El Zonte, Bitcoin has been pioneered as a tool for everyday transactions and social programs targeting the town’s majority poor population. As Bitcoin enthusiasts have flocked to El Zonte, inspired by the imaginary of a Bitcoin-friendly paradise, these mostly White crypto tourists from the Global North have bought up land, patronized exclusive hotels and resorts, and rebranded the town as “Bitcoin Beach.” Drawing on the case study of El Zonte, this article unpacks the material implications and contradictions of Bitcoin adoption in El Salvador. I argue that while Bitcoin has created some opportunities for small-scale aid and the business sector, these benefits are limited and largely undermined by the uneven and neocolonial impacts of crypto on local people, land and resources, and power. Situating the findings from El Zonte within a broader discursive and political analysis of Bitcoin legalization in El Salvador, the paper warns of the ways in which crypto facilitates novel forms of territorial, resource, and political control, while reproducing many of the uneven dynamics of neoliberal economic development.