In a significant political development, El Salvador President Nayib Bukele, known for his pro-Bitcoin stance, has been re-elected as President of El Salvador according to exit polls.
Since assuming office in 2019, Bukele has garnered attention for his policies aimed at reducing gang violence and embracing Bitcoin as legal tender—a pioneering and controversial move globally.
His administration’s introduction of the Chivo crypto wallet and investment in Bitcoin underscored his commitment to cryptocurrency. Despite facing international scrutiny, notably from the IMF, Bukele’s re-election with over 85% of the vote reflects widespread domestic support.
His next term is anticipated to focus on further integrating Bitcoin into the nation’s economy, including launching Bitcoin-backed “Volcano bonds” to finance renewable energy-powered BTC mining. Bukele’s leadership continues to place El Salvador at the forefront of cryptocurrency adoption among nation-states.
An El Salvador Volcano Bond, also known as the “Bitcoin Bond,” is a financial instrument proposed by the government of El Salvador. The concept was introduced as part of the country’s broader initiative to embrace cryptocurrency, particularly Bitcoin, as legal tender—a move that El Salvador made in September 2021, becoming the first country in the world to do so.
But having Bitcoin as legal tender has introduced some complications for residents. When Bitcoin transaction fees soared to 2-year highs as Ordinals inscriptions surged in popularity, people in El Salvador suddenly found it prohibitively expensive to process payments with BTC.
One user in the country pointed out on Twitter that trying to send $100 at the time would have cost them $20 in fees.
Bitcoin fees are prone to surging during times of heavy use because each transaction needs to be verified by a miner. And when there’s lots of transactions waiting, the cost to get a transaction processed quickly can skyrocket.
Editor’s note: This article was written with the assistance of AI. Edited and fact-checked by Stacy Elliott.