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Cryptocurrencies: The price that President Bukele is ready to pay to turn El Salvador into a bitcoin nation | USA

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Nayib Bukele, the president of El Salvador, is taking his public persona of a millennial disruptor to new heights and to a place where no one can predict the consequences. The Central American country is going to be the first in the world to adopt bitcoin as an official currency, a decision that has been announced in English and fast-tracked by a parliament that is controlled by his party, and without offering much explanation to citizens. The move couldn’t come at a more delicate time. All over the world, ransomware attacks – malicious programs used by cybercriminals to block access to an IT system or seize data – are on the rise, paralyzing entire economic sectors, and are based on hackers’ preferred currency: bitcoin.

“This will generate jobs and will help to provide financial inclusion to thousands of people who are outside the formal economy,” Bukele explained to applause last Saturday when he announced the proposal, via a video that was presented at a cryptocurrency conference being held in Miami. The message, which was broadcast in English, was aimed at an audience of technology and cryptocurrency fans. But this was also the first time that a large section of El Salvador’s people had heard about the new currency, which will soon be in their lives. Bukele was presented by Jack Mallers, the director of the payment platform Strike. The 27-year-old spent three months in El Salvador.

In the video of the event, Mallers is seen explaining that during his journey he met Yusef, one of the president’s younger brothers. “If you sort out the problem of money, you can sort out the problems of the world,” says the young man, before pointing to the fact that Salvadoreans who live in the United States will be able to send money to their families without having to pay expensive commissions.

Mallers then makes way for the president, who appears on a screen: “In the medium and long term we are hoping that this small decision will help us to push humanity, at least a little bit, in the right direction,” said Bukele, to huge applause from the audience, but without specifying how. Shortly afterward, the 39-year-old president took to Twitter to respond to questions, and estimated that if 1% of the current capitalization of bitcoin were invested in his country, it could boost gross domestic product (GDP) by 25%.

“People were applauding him like he were a televangelist,” El Faro journalist Nelson Rauda told EL PAÍS. Rauda has been covering the legislative approval of this measure. “He started there and didn’t stop. He even put that laser-eyes thing [on his Twitter photo, a symbol used by fans of bitcoin] and many public servants imitated him; he started tweeting in English and went back to being that Nayib Bukele who seduced international people at the start of his term of office.” Three days after that megaevent in Miami, on Tuesday, the law arrived at the Legislative Assembly. There, the president’s party, Nuevas Ideas (New Ideas), which has a majority, ignored all the usual procedures to see it pass. The legislation was fast-tracked in just five hours and with barely any debate.

‘Cool’ once more

Despite the fact that bitcoins will be an official currency in El Salvador in fewer than 90 days, Rauda says that Bukele has not yet explained the decision at any kind of press conference, only resorting to social media and speaking about the plan mostly in English. What’s more, while parliamentarians dealt with the legislation in the Legislative Assembly, the president was using the audio debate forum on Twitter, called Spaces, to explain the law to an English-speaking audience, accompanied by his brother Karim.

“I started to listen and I said, ‘It makes no sense to continue listening to the proposed law, which is two pages, and the deputies are talking about things that have no relevance,” Rauda explains. “On Spaces, they were giving out many details about the law that they weren’t giving during the parliamentary session. There were absurd things, like in the Assembly they were saying that the use of bitcoin was not going to be obligatory, but the president was asked the same thing and he said it would be.”

This decision to implement the use of bitcoin in his country and focus on the international public has been interpreted by the director of the NGO Acción Ciudadana (Citizen Action), Eduardo Escobar, as being a “smokescreen” to distract from the problems that have seen his government called into question, as well as a way to “change his image on an international level” at a time when the country is moving away from the United States and international bodies and getting closer to China.

“There was a coup, on May 1, managed by Bukele and supported by the Legislative Assembly, where they removed the judges and the public prosecutor,” explains Escobar. “Last week we found out that the government was expelling the CICIES [the International Commission against the Impunity of El Salvador] because it was investigating 12 corruption cases against the current government.” Escobar compares the adoption of the cryptocurrency to the adoption of the US dollar in the country in 2001, which was carried out “without consultation, behind the back of the public and from one day to the next.”

“We are coming off the back of a series of things that have damaged his image and with this, he’s returned to being the cool Nayib, the admired Nayib, someone who is audacious, revolutionary,” Rauda adds. “It’s like a return to the ‘back to basics’ for him.” While Bukele is enjoying levels of popularity above 70% at home, the decision to adopt bitcoin and the subsequent order to generate a plan so that the cryptocurrency can be mined using energy harnessed from the country’s volcanoes has also seen him win new followers among the fans of this technology.

A virtual ‘Wild West’

Beyond the world of geeks, doubts and uncertainty dominate the analysis of this decision by experts and the most critical sectors in his country. “The cybersecurity risks associated with the integration of cryptocurrency into the nation’s financial system are innumerable,” says Steven Silberstein, the general director of FS-ISAC, a global organization that exchanges cyber-intelligence and that focuses on financial institutions. Governments have been working for decades to ensure that banks and financial institutions are secure, given that these days they are considered to be “crucial infrastructure,” the specialist explains. “Substantial resources have been invested to guarantee that the billions of people who depend on a stable financial system can spend their days without worrying about a catastrophic financial collapse derived from a large-scale cyberattack.”

Silberstein points to a devastating episode in 2014, when a cryptocurrency exchange in Japan called Mt Gox was hacked and hundreds of thousands of bitcoins were stolen. Today, each bitcoin is worth around $36,000 (€29,000) each, meaning that the value of the damage today runs into the billions. What was stolen was never recovered, in part because it is very difficult to track who possesses cryptocurrencies, unlike with money that has been deposited into an account. This type of currency is not backed by people, organizations or the trust of a bank, but rather by a secret mathematical language called cryptography.

A small restaurant at El Zonte beach in Chiltiupan (El Salvador), now accepting payment in bitcoin.
A small restaurant at El Zonte beach in Chiltiupan (El Salvador), now accepting payment in bitcoin.JOSE CABEZAS / Reuters

A month ago, United States President Joe Biden made a special televised appearance to speak about a cyberattack that paralyzed a gas pipeline, which saw hackers extort the company and demand that they pay them in bitcoin in exchange for unlocking the IT system. This was the first time that a leader of that country had spoken about the problem of ransomware, a type of cyberattack that usually sees criminals demand something in exchange for freeing a computer system. Senator Elizabeth Warren published a message last week in which she referred to cryptocurrencies as the “new Wild West” and called for strict regulations aimed at protecting investors and weakening cybercrime.

“The use of cryptocurrencies has certainly allowed for ransomware attacks,” Silberstein explains. According to Chainalysis, a company that analyzes these issues, the practice caused $350 million (€288 million) of losses last year, a rise of 311% on 2019 – this coincides with an exponential rise in the demand and the price of cryptocurrencies on a global scale. From the US to Ukraine, attacks of this type have paralyzed financial markets, government ministries and even nuclear power plants.

In the case of El Salvador, the fact that bitcoin will be used alongside the US dollar as an official currency makes the proposal even riskier, given that the legalization of bitcoin as a national means of payment will facilitate the conversion of ill-gotten gains – such as the spoils from ransomware attacks – into clean funds. “Given that El Salvador uses the dollar, will this turn the country into an alternative reference point for turning income from ransomware and other types of digital extorsion into cash?” asks Silberstein.

Bitcoin is a massively volatile currency and the way that banks take care of a currency’s volatility is via interest rates. As such, it’s possible that there could be a rise in interest rates

Ricardo Castaneda, economist at the Central American Institute of Fiscal Studies

“President Bukele likes to put on a good show and this proposal raises his image as a disruptive millennial who is shaking things up in El Salvador,” says Risa Grais-Targow, a Central America analyst at Eurasia Group. “He is making the proposal as a way to create dynamism in the economy, but on studying the context, where there are accusations of corruption aimed at people close to him, the economic policy feels very improvised,” she explains, speaking by phone from New York.

In May, the US State Department published a list of 17 corrupt Central American officials, including Bukele’s Cabinet chief Carolina Recinos, the former security minister Rogelio Rivas, and legislator Guillermo Gallegos, the leader of the Grand Alliance for National Unity (GANA) party, which took the president to power in 2019. While this list has not had any immediate effect, this month the Enel List is expected to be published, which may include specific sanctions for bank accounts in the US, on international transactions, and visa restrictions for those who are targeted.

“In this context, doing anything that creates more concern about transparency, or possible money laundering, feels like adding to the confrontation or perhaps moving away from the road toward a constructive relationship with the US,” Grais-Targow argues. If Bukele forces citizens to use bitcoin, this could drive a wedge into the use of the dollar, in a way that could undermine the future of the country’s dollarization. As such, this proposal could be interpreted as a step toward “dedollarization,” without strictly being a plan to get rid of the currency altogether.

The United States is the country with the greatest weight over the decisions taken by the International Monetary Fund (IMF), with whom Bukele is negotiating a loan that could be as big as $1.3 billion (€1.07 million), and which would be used to drive the economic recovery from the coronavirus crisis. On Thursday, an IMF spokesperson said that the fund’s authorities would meet with Bukele to discuss the issue, and warned that the “adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.”

Legal and obligatory

The new law approved by the Legislative Assembly in El Salvador will force all businesses to offer bitcoin as a payment method, meaning that Salvadoreans will have to invest in the necessary technology for their businesses. The president said on social media that the use of the Strike application will be prioritized. The system works like a digital wallet, and will allow citizens to pay their taxes in bitcoin. As such, the public finances will be exposed to the sudden devaluations of this cryptocurrency, which has fallen up to 22% in a single day.

The law also establishes that any debt can be converted into bitcoin. “This puts the risk in the banking system, because banks are obliged to take payment in bitcoin, bringing all the complexities that has with it,” explains Ricardo Castaneda, an economist at the Central American Institute of Fiscal Studies (ICEFI) in San Salvador. “Bitcoin is a massively volatile currency and the way that banks take care of a currency’s volatility is via interest rates. As such, it’s possible that there could be a rise in interest rates,” something that would see Salvadoreans pay more to service their debts.

The government claims that it will absorb this risk, which Castaneda argues “is a fallacy, because the government is funded by taxes, right? In reality, it will be the poorest people who will have to assume this risk, because in the end all of it is going to be paid as taxes.”

“It’s worrying that they might touch the pensions, that they could convert them into bitcoin,” says Escobar from Acción Ciudadana. “The adjective that describes us is uncertainty, a lack of knowledge and uncertainty about what the government is going to do and the implications it could have,” he complains. “We don’t have any information, nor do we know what the objective is.”

When you consider that 70% of the country’s economy is informal, it’s difficult to imagine that so many citizens could be incorporated into the banking and taxation system, simply because they can now use bitcoin, Castaneda adds. And those who can, would be exposed to fluctuations in price and cybersecurity risks.

“We can assume that many consumers will be relatively or completely new to cryptocurrencies and the platforms used to sell and store them,” says Silberstein from the FS-ISAC. “Without a mass campaign of cybernetic education, consumers could be easy prey for sophisticated cybercriminals who use phishing and other fraud to obtain access to their accounts. There is no support for cryptocurrency like there is for currencies backed by the central bank,” he adds.

For Nelson Ruada, the impression is that in El Salvador, the debate about bitcoin is one for people with money, something that “the majority of the country doesn’t have.” That’s why he believes that at the megaevent in Miami, at which there was talk for the first time about making the cryptocurrency official, the hook for citizens was the fact that they could send currency without paying commissions. The money sent home by citizens residing abroad represents more than 20% of the country’s GDP. However, the journalist warns that this is a “sales promise. There is no public document that refers to that.”

With the popularity of Bukele, says Escobar, the president – a publicist by profession – could sell anything he wanted to. “People are not bothered that no one has told them anything about bitcoin. What he says, in general, is the blessed word. That’s how people take it. What he has managed to build is not a government, but rather a sect that worships his personality.”

English version by Simon Hunter.



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Malaria kills 180,000 more people annually than previously thought, says WHO | Global development

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The World Health Organization has called for a “massive, urgent” effort to get the new malaria vaccine into the arms of African children, as it warned that about 180,000 more people were dying annually from the disease than had previously been thought.

Dr Pedro Alonso, director of the WHO’s global malaria programme, said the RTS,S vaccine, recommended for widespread rollout in October, represented a historic opportunity to save tens of thousands of lives, mostly those of under-fives in sub-Saharan Africa.

But he warned that the global community risked “massive failure” if funding commitments aimed at boosting production and helping deployment of the vaccine were not rapidly made.

“What I think is the real barrier [is] international solidarity,” he said. “Is the world going to allow that there is a first malaria vaccine that can save the lives of tens of thousands of African children every year and they’re going to let it sit on a shelf? Or are they going to step up?”

The British pharmaceutical company GlaxoSmithKlein, which developed the RTS,S vaccine, has committed to donate up to 10m doses for use in the pilot programmes already under way, and to supply up to 15m doses annually.

However, with more than 240m cases globally last year, the potential demand could reach 80 to 100m doses annually, Alonso warned. “Therefore, this is a prime example of where international mechanisms will need to come into play,” he said.

“A vaccine that could save somewhere between 40 and 70-80,000 lives every year, of African children, is something that needs to be treated with the utmost ambition and sense of urgency. And therefore, a slow, gradual scale-up, if you ask me, would not be acceptable. This needs to be a massive, urgent operation to ensure that we can reach as many children as possible and as soon as possible.”

He added: “If the global health community does not respond to this challenge, it will represent a massive failure. I cannot imagine how different leaders, leaders of philanthropy or of financing institutions, are going to go to Africa and advocate for efforts to prevent childhood deaths if they don’t, first and foremost, support the deployment of this vaccine.”

Last week, the global vaccine alliance, Gavi, said its board had approved an initial $155.7m (£117m) for the rollout of RTS,S. The funding would help the introduction, procurement and delivery of the vaccine for eligible countries in sub-Saharan Africa from 2022 until 2025, it said.

Dr Abdourahmane Diallo, CEO of the RBM Partnership to End Malaria, said the announcement would give the private sector “a crucial motive to scale up” the rollout.

“We now call on leaders to step up investment to accelerate the development and delivery of more effective, transformative tools to combat the ever-evolving malaria parasite,” he said.

New figures released by the WHO on Monday underlined the scale of the problem, with a new, “more precise” method of counting estimating that 627,000 people died of malaria last year, 180,000 more than the total would have been according to the old methodology.

The vast majority of all malaria deaths – 96% – were in sub-Saharan Africa.

In its annual malaria report, the WHO said the “doomsday scenario” some had predicted at the beginning of the Covid-19 pandemic – that deaths from malaria would double as a result of disruption to treatment and services – had not materialised.

Nonetheless, it said, deaths had risen by nearly 70,000 last year, an increase of 12%, of which nearly 50,000 were attributable to disruptions during the pandemic. One main cause of disruption was that more than a quarter of insecticide-treated bed nets – the backbone of WHO efforts to combat malaria – were not distributed in 2020.

Faced with a slowing of progress in the fight against malaria, the WHO believes the vaccine could be a crucial new weapon, even though questions have been raised over its limited efficacy. Over four years of trials, RTS,S was found to prevent 39% of malaria cases and 29% of severe malaria cases.

But Alonso rejected concerns. “A reduction of 30% [in] severe cases of malaria means a massive public health impact, larger probably than any other vaccine against any other disease being used right now,” he said.

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Fresh violence at anti-vax protests in Brussels

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Belgian police fired water cannon at violent anti-vaccination protesters outside EU buildings in Brussels for the second weekend in a row on Sunday. More than 40,000 people also protested against lockdowns in Vienna Saturday. Several thousand people also protested in Utrecht, in The Netherlands, as well as in Berlin and Frankfurt, where German police used batons and pepper spray after being attacked by a radical minority in the demonstration.

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‘They see it in corridors, in bathrooms, on the bus’: UK schools’ porn crisis | Pornography

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Barnardo’s works directly with children who are victims of abuse or display signs of harmful or risky sexual behaviour. In 2020-21, they worked with 382,872 children, young people, parents and carers.

In a recent survey of their frontline workers across England and Wales, staff reported a rise in the number of children participating in acts they have seen in pornographic videos, despite feeling uncomfortable or scared. They describe porn as having a “corrosive” effect on child wellbeing.

Child sexual abuse expert Sarah works with children who are displaying signs of inappropriate sexual behaviour. She also trains other professionals who work with children

“I started out as a primary school teacher eight years ago, and I’ve been worried about children seeing porn ever since. Children don’t have to be able to type to see porn – it can be sent to them or shown to them on someone else’s phone. They see it at school, in the corridors, in the bathrooms, on the bus. There is just no censor on any of it – one video leads to another. If you can imagine it, it exists as porn, and children are seeing it.

“I am working with a teenager who was sexually abused by a family member. This young person had been exposed to porn and it was perpetuating what the abuser told them – that this is normal, that it’s not abuse.”

She is particularly concerned, as are her colleagues, about the increasingly extreme nature of the porn freely available on mainstream sites.

“A common role play theme on porn sites is intra-familial abuse – on mainstream sites you will see fetishisation of grandad and granddaughter sex, or stepfathers and stepdaughters. This may lead to a young person not disclosing or getting the support they need. From both angles it is dangerous; it puts the child at risk and encourages the perpetrator.

“The impact of porn shows in children harming others or themselves because they either don’t understand or are so ashamed of sexual urges. Shame is very prevalent and is often hidden.

“We are working with a seven-year-old who has been exposed to porn and is now displaying sexualised behaviour. They had free rein on a device, and someone hadn’t deleted a browser history. Once a young person sees porn, they may feel a need to come back again and again – porn is designed to meet a need. That is a form of sexual abuse against that child.”

Brian* is a senior social worker who has worked with children for over 30 years

“Unfortunately, porn is a feature for the majority of the children who come into our service. The children we support are very damaged. They would be likely to have experienced multiple forms of abuse – sexual, physical and domestic. Porn in and of itself is not the cause of their behaviour but it becomes a compounding factor when it hits that history of vulnerability.

Adult sex offenders can give children a distorted rationalisation for their behaviour, and the messages that are given through porn then fit with that distortion.

Lucy* has worked within the field of child sexual abuse for 16 years.

“We know children find porn distressing – they are telling us that themselves. We have done research with children in schools so that we have a cohort to compare our vulnerable children to, and they are saying the same thing.

“This is not what could be described as erotic or soft porn. They may start on porn sites and quickly begin to see very hardcore material. Or [extreme material] lands in their social media feeds, and they can then feel compelled to go back and look again.

“Children are less able to manage sexual arousal, and this material is designed to be arousing. Lots of children can feel guilty and distressed by what they see. We have 14-year-olds telling us they have to watch it as soon as they wake up. They describe being preoccupied with accessing porn to an extent that impacts upon their day-to-day life.

“We also regularly work with children with learning disabilities, another group vulnerable to the harm of porn. They may be shielded from sexual information and then reach 13 or 14 and take away the wrong learning from porn. They may learn that no means yes, that if you persist, women will enjoy forced sex. These messages are harmful for any child but for children with learning needs or who have developed unhealthy beliefs around sex as a result of abuse, it’s particularly bad.

“After lockdown, we began to get more calls from parents where there is no other obvious trauma, just the exposure to porn. I’ve been doing this 16 years, and children have far more access to porn now.”

* Names and some details have been changed to protect identities

In the UK, the NSPCC offers support to children on 0800 1111, and adults concerned about a child on 0808 800 5000. The National Association for People Abused in Childhood (Napac) offers support for adult survivors on 0808 801 0331. In the US, call or text the Childhelp abuse hotline on 800-422-4453. In Australia, children, young adults, parents and teachers can contact the Kids Helpline on 1800 55 1800, or Bravehearts on 1800 272 831, and adult survivors can contact Blue Knot Foundation on 1300 657 380. Other sources of help can be found at Child Helplines International

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