Two years ago, El Salvador embarked on a historic journey, becoming the first country in the world to adopt Bitcoin as legal tender.
In the span of these two years, this Central American nation has witnessed remarkable transformations and improvements.
It’s a story of determination, challenges, and a significant shift in public perception.
This article delves into the impact of Bitcoin’s legal tender status on El Salvador’s development, explores the challenges it has faced, and examines the broader implications of this groundbreaking decision.
The Challenges and Public Perception
El Salvador’s history is marked by centuries of adversity and struggle.
But the current generation of Salvadorans is determined to break free from the shadows of the past.
New leaders have emerged with a resolute commitment to improving their country, and this newfound resolve has been instrumental in the progress witnessed in El Salvador.
It all began with the bold decision to embrace Bitcoin as a legal tender.
However, it’s worth noting that while Bitcoin has brought about improvements, a recent poll indicates that Salvadorans rank the Bitcoin law as the lowest achievement of the Bukele government.
This doesn’t necessarily reflect disapproval but rather underscores that other pressing issues have a more direct impact on their daily lives.
This aligns with a fundamental lesson from the world of cryptocurrency: meaningful change demands hard work, dedication, and a focus on the long term, rather than seeking quick shortcuts.
Many have speculated about the fate of the Bitcoin project if President Bukele were unable to secure a second term or chose to leave the presidency.
Critics argue that Bitcoin’s success is intertwined with his leadership, and it would falter without his influence.
However, it’s crucial to recognize that El Salvador’s transformation isn’t solely attributable to Bukele.
It’s a result of the people’s mandate for change and the capable leaders he’s assembled to carry forward the vision.
Tangible Improvements
Choosing to adopt Bitcoin was no easy task for El Salvador, especially in the face of pressure from international entities like the IMF and the U.S. government, along with threats to halt foreign aid and loans.
Immediately after adopting Bitcoin, the country’s bonds were downgraded to junk status, with virtually no demand.
However, in the ensuing two years, El Salvador has not only met its bond obligations but has also seen its bonds become one of the most promising investments.
While these financial maneuvers may not directly impact the average Salvadoran, other developments certainly do.
The nation has experienced a notable boost in tourism, increased activity in the real estate sector, and substantial infrastructure upgrades.
This includes the construction of new roads, enhancements to airports, and the establishment of a new ferry route connecting El Salvador to Costa Rica.
These tangible improvements have not only made the country more attractive to tourists but have also created opportunities for its citizens.
El Salvador’s introduction of its digital assets law, along with favorable tax incentives for tech companies, has resulted in a landmark agreement with Google.
This partnership has motivated Google to base some of its Cloud services in the country, signaling growing confidence in El Salvador’s business environment and its potential to become a tech hub in Latin America.
One particularly exciting development in the realm of Bitcoin is the entry of Volcano Energy into the mining sector.
This forward-thinking company has invested a staggering $1 billion USD to establish a mining operation powered by wind and solar energy.
Moreover, they plan to harness the country’s geothermal potential for Bitcoin mining, showcasing not only El Salvador’s commitment to sustainable mining but also attracting significant foreign capital.
In a move that underscores El Salvador’s growing importance in the global financial ecosystem, both Bitfinex and Binance have sought regulatory stability to set up their cryptocurrency exchanges and operate within the country.
This signifies recognition of El Salvador’s dedication to fostering a supportive business environment.
Security Transformation
One of the most fundamental achievements has been the government’s success in addressing the country’s security issues.
El Salvador, once notorious for having the highest murder rate per capita, has undergone a dramatic transformation and is now considered one of the safest countries in the Americas.
This transformation, though met with criticism and accusations of dictatorship, has significantly improved the daily lives and human rights of Salvadorans.
These accomplishments have led to widespread public approval of President Bukele and his government, resulting in some of the highest approval ratings in the world.
This support could translate into a second presidential term and a strengthened legislative assembly majority, crucial for passing laws, including those related to Bitcoin.
The United States has also shifted its stance, appointing a new ambassador who has given a favorable review of El Salvador.
This marks a notable change in the U.S.’s relationship with the country after years of criticism.
While it may not signify complete acceptance of El Salvador’s Bitcoin Law, it does signal a degree of tolerance.
As the U.S. re-engages with El Salvador as a trusted partner, it significantly reinforces the government’s security and economic development efforts, as local opportunities discourage illegal immigration.
Educational Initiatives: My First Bitcoin and CUBO+ Program
Beyond economic and infrastructure improvements, educational initiatives have played a crucial role in El Salvador’s Bitcoin journey.
One notable organization making a difference is the Educational NGO My First Bitcoin.
This organization has made significant strides in promoting Bitcoin education within the country.
After training hundreds of teachers and educating over 25,000 young Salvadoran students, their impact has been nothing short of astounding.
The curriculum developed by My First Bitcoin has not only influenced the lives of Salvadoran students but has also gained international recognition.
Furthermore, My First Bitcoin has entered into an agreement with the Ministry of Education to incorporate its Bitcoin curriculum into the national education system.
This ensures that future generations of Salvadorans will be well-versed in the principles of sound money and blockchain technology.
In the realm of more advanced education, the CUBO+ program aims to train developers in Bitcoin programming.
This initiative is of paramount importance for the continued adoption and development of Bitcoin, as Salvadoran developers need to understand and contribute to the core Bitcoin code.
Students participating in the CUBO+ program have been carefully selected through a competitive meritocratic process.
They are taught by industry experts such as Jimmy Song, Pierre Rochard, and Saifedean Ammous.
Notably, Saifedean Ammous has also been newly appointed as an economic advisor to the Salvadoran government, underlining the government’s commitment to fostering expertise in the Bitcoin space.
Conclusion
While the average Salvadoran may not yet be using Bitcoin in their daily transactions, the ethos and work ethic inherent to Bitcoin – the proof-of-work principle – have reshaped the country’s trajectory.
El Salvador stands alone as the only nation where Bitcoin is recognized as legal tender, making it an attractive destination for companies looking to develop their Bitcoin-based businesses.
As El Salvador continues its journey as a developing economy, the hard choices made in the past two years have laid a solid foundation for a brighter future.
The world watches with keen interest, and one fact remains undeniable: El Salvador is a Bitcoin Country, and its Bitcoin revolution is here to stay.
