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Exactly three years ago today, on September 7, 2021, El Salvador became the first country in the world to accept Bitcoin as legal tender. That move marked a significant milestone in the nation’s financial history and made the North American nation a trailblazer in digital asset usage.
The adoption of Bitcoin as a legal tender primarily aimed to provide financial inclusion for citizens and improve remittances from diaspora communities. Additionally, the government considered it a way to attract financial innovation and boost the country’s economic growth.
Economic Impact and Financial Gains
El Salvador has witnessed continued investment in Bitcoin through daily purchases. With President Nayib Bukele in charge, the cumulative Bitcoin portfolio has soared to over $318 million or 5,865 BTC. Given the fluctuating price of the digital asset, the buying price has averaged about $43,877 per BTC.
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In the crypto market, Bitcoin currently trades for about $54,600. This implies that over $10,000 per BTC is owned and that the El Salvadoran wallet makes over $30 million in profit. Despite criticisms, this decision to adopt Bitcoin is a plus for the country.
Commenting on El Salvador’s adoption of Bitcoin, Alex Momot, CEO of Peanut Trade, believes the experiment has recorded significant success. According to him, despite the risk, El Salvador has proven that adopting BTC as a legal tender is possible.
Why Has Global Ripple Effects Been Stalled?
The adoption of Bitcoin as fiat has had its challenges for El Salvador. Notably, when prices crash hugely during a bear market, the economic impact usually elicits criticism from finance experts. This uncertainty in the price of BTC has slowed adoption by other sovereign nations.
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Since El Salvador’s bold move, only one other African country has followed. In 2022, the Central African Republic legalized the use of cryptocurrencies to promote financial inclusion and economic growth.
Industry experts maintain that the world’s biggest countries are unlikely to jump on the Bitcoin train. A major hurdle to overcome would be their relationship with traditional international creditors like the World Bank. Interestingly, in 2021, the International Monetary Fund tried to get El Salvador to reverse its decision. However, the country stayed on the path of its decision to use the digital asset.
El Salvador’s Ambitious Project
Recently, as reported by TheCoinRise, El Salvador unveiled an ambitious Bitcoin City project valued at $1.6 billion. The investment, made by the Turkish company Yilport Holdings, is targeted at two key port developments: the port of Acajutla and the port of La Unión.
While the crypto community awaits other countries to boldly adopt BTC, El Salvador is celebrating its third anniversary of making Bitcoin legal tender.
