Did El Salvador benefit from making Bitcoin a legal tender?
Bitcoin is the largest cryptocurrency by market cap, which has attracted skepticism and faith since it was launched in 2009. Bitcoin experienced many ups and downs over the years, but it managed somehow to maintain its value and be the preferred choice for investors worldwide. Over the years, people have seen Bitcoin as a store of value and an investment, but lately, it has also been considered a legal tender, because BTC has become very accessible, so you can even buy Bitcoin with credit card.
El Salvador was the first country to make Bitcoin a legal tender, which could inspire many other nations worldwide. El Salvador adopted Bitcoin as a legal tender in September 2021, and Nayib Bukele, the president of the country, was the man behind this idea. Now that more than two years have passed since this event, we can finally see whether accepting Bitcoin as a legal tender has brought advantages or not.
El Salvador has undergone some remarkable improvements and changes., and although some can consider these events mere coincidence, the truth is that the nation’s profound transformations are most likely a result of Bitcoin initiatives.
In this article, we will explore how the acceptance of Bitcoin as a legal tender impacted El Salvador. Are you ready to discover these facts? If yes, let’s start.
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Did the public perception change?
El Salvador doesn’t have the best history to remember, as it has endured a lot of struggles and adversity over the years, which is why this generation wanted to break free from the limitations of the past. The current leaders have made a resolution to help the country prosper and improve citizens’ quality of life, which is also why El Salvador adopted Bitcoin as a legal tender.
Although the acceptance of Bitcoin brought some notable improvements, this decision is not something that all the citizens agreed with. What’s more, some individuals think that the Bitcoin law was one of the poorest decisions that Bukele has taken under his government. This fact doesn’t especially mean that the Salvadorans don’t accept Bitcoin at all in their life, but they think that the president should take care of other more pressing issues that directly impact their everyday lives.
They also think that the Bitcoin project couldn’t have been possible if Bukele hadn’t been so interested in digital currencies, which made them wonder what would happen with Bitcoin if Nayib Bukele did not achieved a second term presidency.
What tangible improvements can be seen?
El Salvador didn’t have a smooth journey when it chose to adopt Bitcoin, mainly because of the pressure from the U.S. government, the IMF, and other financial entities that said this measure would halt foreign aid and loans. The negative impact of this decision can also be seen in the country’s bonds, which were downgraded to junk status and didn’t have demand. Still, things have positively changed, and since then, El Salvador’s bonds have been one of the most promising investments. Yes, these factors don’t directly impact the average citizen, but they have certainly benefited from other improvements that accepting Bitcoin has brought.
For instance, since 2021, the country has experienced massive growth in tourism and infrastructure upgrades, increased real estate activities, created new roads and airports, and established a new ferry route to Costa Rica. These improvements have enhanced the country’s value and brought opportunities for citizens, including offering new jobs.
Additionally, El Salvador introduced favorable tax incentives for tech businesses, opted for a digital assets law, and made a landmark agreement with Google, which is why the giant company chose to base some of its cloud services in El Salvador. This was a huge move in El Salvador’s history, which increases the chances that Latin America will be seen as a tech hub in the future.
Furthermore, enhancements have also been made in the mining sector, where a significant company, Volcano Energy, has decided to support the energy that Bitcoin mining requires. To make this idea possible, Volcano Energy has invested $1 billion to improve the mining operation in El Salvador and make this process more sustainable by using wind and solar power. They also plan to take advantage of the country’s volcanic energy and use the geothermal potential to power Bitcoin mining. This initiative highlights the sustainability of El Salvador in the Bitcoin ecosystem and offers a chance to attract enormous foreign capital into the country.
Bitcoin has also improved the security of El Salvador
In the last few years, the best improvement of the country’s status has been improving security challenges. In the past, El Salvador was ranked as one of the countries with the highest number of murders, but things have changed, and now El Salvador is the safest country in Latin America. Although the adoption of Bitcoin has been seen as an act of dictatorship, with the help of this initiative, the human rights of Salvadorans and their daily lives have greatly improved.
El Salvador has also benefited from educational initiatives
My First Bitcoin is a project implemented after Bitcoin became legal tender. It trained teachers with the best practices and educated many Salvadoran students to use Bitcoin to benefit from a better future. Additionally, the Ministry of Education has considered implementing Bitcoin into the national education system so that all future generations will become familiar with cryptocurrencies.
Last words
Although time still needs to pass to see the full impact that Bitcoin has had on El Salvador, we can witness some changes that have already happened. El Salvador was the first country to accept Bitcoin as legal tender, which made this state more appealing to investors and crypto enthusiasts worldwide. The acceptance of El Salvador has been seen as an experiment, and the entire world has watched this event with keen interest.