Bitcoiners don’t cry.
If anything, the most committed and focused Bitcoin advocates are usually stereotyped as merciless trolls and self-satisfied jerks, whether they’re making fun of BTC skeptic Peter Schiff or other cryptocurrencies. So it is truly exceptional that the biggest Bitcoin announcement in a year full of them – the adoption of Bitcoin as legal tender in El Salvador – was made through a veil of overwhelmed tears.
Jack Mallers, the elfin CEO of Bitcoin payments app Strike, was the man with the waterworks. Mallers had helped shepherd the initiative to the finish line over months of meetings with Salvadoran President Nayib Bukele. By the time he was on stage at Bitcoin Miami in June, the weight of it all caught up with him.
“That moment to me was way bigger than myself,” he says, “Or [even] the country of El Salvador. In my opinion, this is one of the bigger developments in economics and emerging markets in the last 250 years. It’s the most important thing I’ve ever been a part of, and likely ever will be.” (Some quotes from our conversation have been edited for clarity and length.)
“[And] to see my dad in the front row was really special. He told me I was making him proud, making the family proud.” Mallers is the third generation of his family to work in finance – his grandfather was chairman of the Chicago Board of Trade.
That pedigree makes Mallers’ professed humility a bit more surprising. To hear him tell it, he helped midwife a financial revolution more or less by chance. “A few years ago, no one cared what I really had to say. I’m a pleb. Forever a pleb, always will be a pleb. I don’t think of myself as an influencer whatsoever.”
The humility is fair in at least one crucial sense: despite long weeks spent talking to Bukele and his inner circle, and though Strike is marketing its payments app there, El Salvador’s big move isn’t a Strike project.
“I was advising the government,” says Mallers, “And that was it. Strike has a headquarters in San Salvador, and all of our [user] metrics and cohorts are growing at a shocking rate … and we’re very excited to roll out across Latin America and other emerging markets.”
“But neither I nor my company is representative of what’s going on there, and that’s tremendously important. The whole concept is that you don’t need any central [provider]. If Columbia were to launch, you don’t need a government wallet, you don’t need a Strike.”
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That’s just scratching the surface of why El Salvador’s adoption of Bitcoin as financial infrastructure is so transformational. There is, of course, the headline advantage of quick and cheap cross-border payments – remittances from emigrants make up a large portion of El Salvador’s GDP, and a bitcoin-based system could drastically reduce fees relative to the likes of Western Union. And moving money entirely on their phones may keep Salvadorans safer than older methods.
But the stakes are even larger than that. When he really gets going on the significance of El Salvador’s transformation, Mallers face tightens and his gaze goes flat. No longer the bubbly, humble goofball, he’s now the ferocious Bitcoiner of Christine Lagarde’s worst nightmares.
“Monetary expansion from central banks puts emerging markets, including El Salvador, at tremendous risk. Now you have an emerging market that can opt out of their relationship and reliance on a central bank or an institution like the IMF and … find opportunity in a separate monetary system that lives and is defended within a distributed network.”
The moment is at least as big for Bitcoin as it is for El Salvador – one of a series of high-profile validations of the system that defined 2021. Despite some hiccups with the rollout of El Salvador’s Chivo wallet, Mallers sees El Salvador’s policy as a massive vindication for Satoshi Nakamoto’s vision.
“First and foremost, bitcoin works,” says Mallers. “I’ve been around long enough where that wasn’t necessarily always [clear]. And going forward, what it means is – how do you price that? How do you price the fact that there is a monetary policy, a monetary asset, a monetary energy … that you can rely on, that’s defended by a distributed system?”
“It looks like this [Bitcoin] thing is going to work. It doesn’t look like it’s going to zero. It looks like it’s financial acid, and anything it touches, it’s really going to swallow up and just destroy.”
That’s an understandably worrying vision for some in the legacy financial system. The International Monetary Fund and the World Bank in particular have balked at El Salvador’s plan. A forthcoming Salvadoran bond backed by Bitcoin and Bitcoin mining could help the country make an end-run around IMF financing, which is often doled out to developing countries with serious strings attached.
Mallers professes confusion at the development banks’ hostility.
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“I actually just presented at the IMF, and this is what I told them: The G20 and the U.N. have a mandate to lower the cost of remittance and cross-border payments to 5%. And it’s because low wage workers, immigrants, and refugees are reliant on sending money back home to smaller markets …
“I think that if the U.N. and the G20 really want to lower remitting costs, want to improve financial inclusion, want to build stability in financial markets, my pitch to them is, you should take a look at Bitcoin, and stop trying to mandate [lower prices] for Western Union.
“It’s an opt-in system, and El Salvador is using it to improve the quality of their [citizens’] lives. So what? If it was a hammer or a nail, or it’s bitcoin, it’s just a tool. If you have a problem with people improving their lives and their citizens’ lives, then I have a problem with you. Then I’d really question your motives.”
But that’s about as negative as Mallers is willing to get. “We should be celebrating, because humans have invented the best financial tool in our history, and it’s an exciting time to be alive and use it.”
Of course, Mallers’ role in that evolution does give his company a leg up on the future, and Strike is prepared to seize it. “We’re going to launch in a lot of emerging markets. And I think there are also a lot of developed market [opportunities] … We’re trying to build the best consumer experience in the world. Step by step, more countries, more features, more products. We’re just getting started.”
“I just feel lucky to be alive and capable of building things right now,” says Mallers, his eyes sparkling. “It’s a unique time for our species.”