Key Takeaways
- 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.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
