President Bukele Reflects on El Salvador’s Bitcoin Gamble and Its Unmet Expectations

• El Salvador made Bitcoin a legal currency on Sept. 7, 2021.
• The nation holds roughly $350 million worth of BTC in its public wallet.
• The nation has purchased 1 BTC token a day since 2022,

It’s been almost three years since El Salvador shocked the world with its decision to adopt Bitcoin (BTC) as legal tender, which President Nayib Bukele describes as a “new positive” so far.

Work in Progress

During a lengthy interview  with TIME Magazine on Aug. 29, Bukele reflected on his Bitcoin gambit and said that while the move to adopt crypto has seen some benefits, he admits there’s still some way to go:

“Bitcoin hasn’t had the widespread adoption we hoped for. Many Salvadorans use it; The majority of large businesses in the country have it. You can go to a McDonald’s, a supermarket, or a hotel and pay with Bitcoin.”

He remarks that it’s not quite reached the levels that they had expected. But he also explains that it’s an entirely voluntary system, citizens aren’t forced to adopt BTC, it’s an option. Though he doesn’t insist that Bitcoin is the future of money, he believes there’s a bright future in Bitcoin.

“I wouldn’t consider it a resounding success. Still, I do believe that the positive outcomes outweigh the negative, and the issues that have been highlighted are relatively minor.”

Having initially invested $135 million into BTC, the country now holds 5,857.76 BTC worth some $350 million in its “public wallet alone .”

Though he feels it could have worked better, there’s still plenty of time to build up its success.

Despite this sentiment, he notes it renewed interest in El Salvador as a country, generating new investments and increasing tourism.

First Mover Advantage

Regarding the positive and extremely critical attention El Salvador received for its Bitcoin gambit, Bukele notes that overall, it’s been a “net positive.”

He describes the financial inclusion that it has helped promote and the profits it raised for individuals and businesses, highlighting that El Salvador has a “small advantage” for being a first mover.

Bukele notes that the largest investment funds on Wall Street, namely BlackRock, are offering Bitcoin products, which he says was “unthinkable” in 2021.

He also notes a recent report  from the International Monetary Fund (IMF), which said the risks posed by El Salvador’s Bitcoin integration “have not yet materialized.”

However, in the same report, the IMF highlights several improvements that need to be made to mitigate said risks.

Aspirationally, Bukele says there’s been “nothing but benefits” in the wake of its decision to legitimize BTC as a legal currency, though not as many as he’d wanted.

Building Up

Since 2022, El Salvador has been buying 1 BTC a day, a program that appears to have no final date. In fact, Bukele has previously stated that they’ll continue to purchase until it becomes “unaffordable with fiat currencies.”

This would suggest a pretty aggressive and lengthy investment strategy. But what of other crypto technologies?

The nation has been working closely with the largest stablecoin provider in the world, Tether (USDT), to build gigantic volcano-powered Bitcoin mining facilities.

The $1 billion project is part of the nation’s effort to grow its computing power to 1% of the Bitcoin network.

Notably, Tether is behind El Salvador’s Visionary Freedom Visa Program, which allows people to acquire citizenship through BTC and USDT investments.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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