Does Bitcoin benefit El Salvador?

07 Jun 2023 by rate3

It’s been two years since Bitcoin was made a legal tender in the country on June 5, 2021. The national treasury department has allocated a cumulative amount of $103,233,360 for its BTC acquisitions since 2021, with an average purchase price of $43,357. Presently, considering the prevailing prices, El Salvador’s collection of BTC is valued at approximately $61.3 million. Consequently, the country is currently facing a loss of around $40 million on its BTC investment.

There were protests about the use of BTC as a legal tender, citing security and economic risks of using a volatile digital asset as a legal tender. A bill called the Accountability for Cryptocurrency in El Salvador Act has been introduced to assess the risks for cybersecurity, economic stability, and democratic governance in El Salvador related to the adoption of BTC.

Overall, while the volatile nature of cryptocurrencies poses risks, it is crucial to consider the long-term implications of El Salvador’s proactive stance towards cryptocurrency adoption. It brings significant competitive advantages, such as financial inclusion, improved remittance processes, increased foreign investment, and enhanced economic sovereignty, which are crucial for this country to assure a prosperous future for its citizens.