El Salvador’s Bitcoin Efforts in The Last Three Years
El Salvador’s President, Nayib Bukele was sworn in for a second term on June 1 in an event that saw pro-Bitcoin (BTC) supporters. The Bitcoin community reacted to Bukele’s swearing-in event reflecting on developments of the crypto market leader, Bitcoin, and how it can change a nation’s economic outlook.
The past few years have also seen critics, especially from traditional finance circles. Most naysayers of Bukele Bitcoin hub for El Salvador point to the crypto volatility citing scenarios where huge losses can be recorded. Furthermore, several jurisdictions’ global regulatory differences and hostilities are reasons for criticism.
Bukele Turns El Salvador Pro-Bitcoin
Bukele became President in 2019 and made Bitcoin a legal tender in 2021. On September 7, 2021, the Bitcoin law came into effect after being passed three months prior by parliament becoming the first country to recognize Bitcoin as a legal tender. Subsequently, the government increased its holding to 400 BTC and approved a $150 million Bitcoin fund to convert BTC to USD.
At the moment, El Salvador now holds 5,750 BTC, worth approximately $350 million as the country’s President remains bullish on the asset. In March Bukele transferred $400 million worth of assets for a cold wallet to be stored on its territory.
“We’ve decided to transfer a big chunk of our #Bitcoin to a cold wallet and store that cold wallet in a physical vault within our national territory. You can call it our first #Bitcoin piggy bank. It’s not much, but it’s honest work.”
The Bitcoin Dream
Several crypto enthusiasts have lauded the string of Bitcoin support notched in the country so far. Bukele’s Bitcoin strategy is multi-faceted as he aims to increase financial participation, integrate unbanked citizens, and boost foreign investment. This led to Bitcoin investment which has yielded gains as the asset’s price tapped an all-time high above $73,000.
His move to integrate Bitcoin into the economy to foster economic stability and growth while reducing dependence on the dollar is hailed as a landmark effort. The Argentinian government is working with the country to address Bitcoin adoption amongst other related areas. Furthermore, El Salvador has attracted several crypto firms to its jurisdiction.
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