El Salvador, that brave testing ground in northern Central America, covers an area of approximately 21,041 square kilometers and has a population of approximately 6.7 million people. The country, known for its rich volcanic landscape and diverse ecosystem, has been at the forefront of the cryptocurrency revolution, from boldly adopting Bitcoin as legal tender in 2021 to adding Bitcoin education to public school curricula in 2024. cutting edge. After three years, it is back to the cyclical moment of annual review. MetaEra has carefully sorted out the evolution of El Salvador’s Bitcoin-friendly policies and its action trajectory during this period, and will lead everyone to review the past three years of El Salvador’s continued friendliness to cryptography. Find out, have they really made any money?
Origins: The man behind Central America’s Bitcoin storm
Why does Salvado love Bitcoin so much? Who is the driving force behind this?
It’s El Salvador’s current president, Nayib Bukele, who since taking office in June 2019 has continued to give the green light to the popularity and adoption of Bitcoin across the country. He is the first president in El Salvador's history who does not belong to the two traditional political parties (FMLN and ARENA) and is known for his unconventional governing style and active social media presence. His innovative thinking and youthful energy have won him widespread support among young voters.
Source: ForesightNews
Bukele's political career began in 2012, when he ran for mayor of Nuevo Cuzcatlán as a candidate of the FMLN (National Liberation Front) party, winning with 49% of the vote. During his tenure, he implemented a series of social and infrastructure projects to improve the quality of life and security of citizens. In 2015, he ran for mayor of San Salvador with the same party and easily won the leadership of El Salvador's largest and most important city with 89 percent of the vote.
On February 29 this year, El Salvador’s President Nayib Bukele posted on X that as the price of Bitcoin rose, El Salvador’s Bitcoin holdings had made profits of more than 40%. Bukele also said El Salvador has no plans to sell Bitcoin. It is reported that El Salvador’s average holding cost is $44,292, and it holds a total of 2,381 Bitcoins in its treasury.
2021: Take a bold plunge and Bitcoin officially becomes legal tender
2021 is the beginning year of Bitcoin-friendly policies in El Salvador. In June, El Salvador’s Congress voted with an absolute majority to pass a bill officially making Bitcoin the country’s legal tender, making El Salvador the first country in the world to give legal status to cryptocurrencies. On September 7, the bill officially came into effect, and El Salvador’s Bitcoin policy began to be implemented.
Prior to the announcement, the El Salvadoran economy faced many challenges. The country relies on the U.S. dollar as its legal tender and has a relatively slow economy, with remittance revenue accounting for a significant portion of GDP. Bukele believes that the introduction of Bitcoin can help solve these problems and improve the transparency and efficiency of the financial system.
As El Salvador officially recognized Bitcoin as legal tender, the government also launched a digital wallet called "Chivo" and installed Bitcoin ATMs across the country. Every Salvadoran who registered the wallet received $30 worth of Bitcoin as an incentive, and the whole country celebrated, immersed in the craze brought about by Bitcoin.
In addition to launching the Chivo wallet, Nayib Bukele actively promoted Bitcoin adoption during the year, announcing on September 7 that the country’s government would purchase the first 200 Bitcoins. Over the next two weeks, El Salvador purchased a total of approximately 700 Bitcoins.
2022: Opinions vary, the effectiveness and controversy of Bitcoin investing
As we enter 2022, El Salvador’s Bitcoin policy continues to generate concern and controversy. This year, the government suffered a heavy blow from its investment in Bitcoin, with the cumulative purchase cost exceeding $101 million. However, Bitcoin's market performance has been a rollercoaster, with dramatic price fluctuations causing more than 50% paper losses on El Salvador's investments.
Despite facing huge losses, President Bukele of El Salvador has repeatedly stated that when the government "increased its position" in Bitcoin, it was "buying on dips" in an attempt to strengthen the people's belief in Bitcoin. But the ruthlessness of the market makes Bitcoin’s prospects seem even bleaker, and the country of cryptocurrencies seems to have lost its way. In addition, the International Monetary Fund (IMF) has also continued to put pressure on El Salvador’s Bitcoin policy, urging the country to cancel Bitcoin’s legal tender status, warning that this may have irreparable consequences for the integrity, stability and consumer protection of the financial system. Estimated risk.
Under the clouds, the Salvadoran government’s belief in Bitcoin remains firm. In this year, El Salvador also ambitiously planned to build a Bitcoin city at the bottom of the volcano, all funded by Bitcoin. However, the public responded negatively to this, and a wave of large-scale protests was triggered. Photographer Thomas Dvosak traveled to El Salvador in March 2022 to record the face and life of the country after President Bukele adopted Bitcoin as legal tender, capturing true images of this historic moment.
Source: Thomas Dvosak is building a future “Bitcoin City” on the volcanic slopes between La Union and Conchagua
2023: Continued hard work, continuation and expansion of Bitcoin policy
In 2023, President Bukele of El Salvador was successfully re-elected and continued to promote Bitcoin policy. Despite facing opposition from the International Monetary Fund and floating losses on Bitcoin investments, Bukele's re-election appears to indicate that El Salvador's Bitcoin experiment did not fail as reported by mainstream media.
During the year, El Salvador Vice President Felix Ulloa also stated that Bitcoin would remain El Salvador’s legal tender during Bukele’s second term. Additionally, El Salvador approved an immigration law granting citizenship to foreigners who donate Bitcoin to El Salvador’s government and economic development projects.
In order to promote the implementation of Bitcoin’s legal tender status, El Salvador established the National Bitcoin Office at the end of 2022 with the aim of managing all projects related to cryptocurrency. In early 2023, the Salvadoran Congress approved a bill on the issuance of digital assets, establishing a legal structure for all digital assets, allowing the public issuance and transfer of digital assets, and laying a legal foundation for the issuance of its Bitcoin bonds.
Although Bitcoin usage declined in 2023, El Salvador has made some progress in the cryptocurrency industry. For example, the entry of cryptocurrency companies such as Binance and Tether into El Salvador has boosted cryptocurrency development in the country. Additionally, El Salvador plans to issue Bitcoin bonds on RWA securitization platform Bitfinex in the first quarter of 2024.
2024: “My first bitcoin” is officially included in public school curricula
As Bitcoin policy continues to deepen, in 2024, Salvador took action to promote Bitcoin education in public schools, and the “Bitcoin Experiment” has successfully penetrated into the primary school age group.
President Bukele attaches great importance to the popularity of Bitcoin in education. He knows that Bitcoin and blockchain technology will become the backbone of the future economy, and El Salvador must have a place in this digital revolution. Therefore, he cooperated with the "Mi Primer Bitcoin/My First Bitcoin" organization to incorporate Bitcoin education into public school curricula to cultivate the younger generation's understanding and interest in the digital economy. Students will receive a certificate of completion from the course, and Mi Primer Bitcoin will be the primary source of material for the Bitcoin course portion.
Source: ForesightNews
Bukele hopes to cultivate more technical talents and promote the development of the country’s digital economy through Bitcoin education. To this end, the government has also supported a number of related research and development projects aimed at improving the country's scientific and technological innovation capabilities.
future outlook
Overall, El Salvador, as a small country with a small size and population, actively embraces new things, seizes new directions, and improves its international visibility and influence in the global cryptocurrency market. With the continuous optimization of the policy environment and the continuous advancement of technological innovation, El Salvador is expected to become an important part of the global cryptocurrency market, showing great potential and vitality. This country is leading the cryptocurrency development trend in Latin America and even the world with its unique perspective and actions, injecting new vitality into future economic growth and social progress. The story of El Salvador is not only a country’s economic transformation, but also a microcosm of global digital currency innovation.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "Foresight News"
Original author: Echo, Meta Era Global
