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With Bitcoins as an official currency and plans of building a Bitcoin City, the El Salvadorian president Nayib Bukele seems to love the cryptocurrency.
It gained worldwide attention when El Salvador announced its new official currency. On September 7th, 2021 Bitcoins became a legal tender in the Central American country. This made El Salvador the first country in the world to give Bitcoins the status of an official currency in the nation. President Nayib Bukele was one of the main forces in the promotion of Bitcoin status, and he seems to have a passion for Bitcoins.
The president has been owning Bitcoins for years according to bloomberg.com, and the media talk about a Bitcoinification in El Salvador. It’s probably best proved in November 2021 when the president went on stage to present the new El Salvadorian prestige project: Bitcoin city.
From El Zonte to Bitcoin city
In a year of spectacular Bitcoin news, where the cryptocurrency hit record-high rates, the El Salvadorian news about the Bitcoin city still seems to be some of the more eye-opening crypto news of 2021, and with the help of cryptomeister.com, you never miss crypto news.
The Bitcoin city is reported to feature everything with residential areas, services, entertainment, museums, commercial areas, restaurants, bars, and even an airport. Everything runs around Bitcoins and the people of the Bitcoin city will only pay value-added tax – no taxes on income.
The El Salvadore Bitcoinification started in the small surfer village El Zonte in 2019. In this town, the local economy started using Bitcoins. Salaries were paid in Bitcoins, bills were paid in Bitcoins, and the tourist would pay for services with Bitcoins. This gave so good experiences with Bitcoins, that two years later the Bitcoin then became a legal tender in El Salvador. Now the country has even started mining Bitcoins with volcano energy.
Low Fees and High Instability
The implementation of Bitcoins in El Salvador has its pros and cons. A huge part of the poor El Salvadorian economy is related to money earned in the USA which is transacted to accounts in El Salvador. But this isn’t a free service so the El Salvadoran economy is losing a lot of money in transaction fees. These fees can be avoided by using Bitcoins when you transfer between wallets, and therefore the cryptocurrency is seen as an advantage to the economy of El Salvador.
But the citizens of El Salvador are also worried about the instability of the Bitcoin currency. In 2021 the Bitcoin has both been at record-high rates with a value of 67,000 dollars for 1 Bitcoin. But the currency has also been going down again for a rate of 30,000 dollars for 1 Bitcoin. This means that the people of El Salvador have the risk of losing big amounts of their savings when the rate goes down.
In just half of a day, the value of Bitcoins can drop by more than 7 percent, as seen on November 26th, 2021. So, even though stores in El Salvador now have to accept Bitcoin payments, it’s still a low percentage of El Salvadorian transactions that are committed with Bitcoins. Nevertheless, the president still sees a huge potential in digital cryptocurrency.
