One year Since El Salvador announced Bitcoin adoption plans! what&039s the latest? – BusinessToday

Today last year, the president of El Salvador, Nayib Bukele, announced that the country would launch a bill to make the bitcoin cryptocurrency legal tender in the South American nation.

Bukele kept his word, making El Salvador the first nation to adopt bitcoin as legal tender on September 7, 2021.

Reading: After el salvador adopted bitcoin currency

The president announced his intentions to make bitcoin the legal tender of el salvador at the bitcoin 2021 miami conference. It is interesting to note that the bukele move is considered the first experiment in a country in the use of a volatile currency as legal tender. In particular, this scheme attracted many critics, including the International Monetary Fund and leading economists.

many experts claimed that this step would actually lead to more money laundering and illegal activities.

Several financial experts doubted the results of this decision and highlighted that bitcoin is highly volatile. they also argued that the cryptocurrency does not have any physical backing, which makes this decision even more unwise and underdeveloped.

The volatility of crypto markets, especially bitcoin, can also be understood through numbers. bitcoin was trading near $69,000 in November 2021 and crashed to $30,000 levels in June 2022, a little over six months. The global market capitalization of cryptocurrencies also fell from an all-time high of $3 trillion to $1.25 trillion in the last 6 months.

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why did el salvador plan to adopt bitcoin as legal tender?

President Bukele, while announcing his plans to legalize bitcoin as legal tender, stated that this was to financially improve the rather underdeveloped country. Bukele said the measure would make financial services more accessible in the Latin American country where more than 70 percent of the local population does not have a bank account.

Bukele also said that this measure would also improve remittances from abroad, which help the nation’s economy. it is interesting to note that bitcoin transactions are considered cheaper to send large sums of money at a considerably lower rate.

The president claimed that after the underdeveloped adoption of bitcoin as legal tender, the country would save $400 million in annual remittance fees.

how did the government help adopt bitcoin in el salvador?

After the law was implemented in September, the Salvadoran government launched the Chivo Wallet app. The nation also held awareness camps far and wide to teach people how to use the digital wallet and familiarize them with bitcoin.

chivo wallet app allows users to convert bitcoins to dollars and vice versa without fees. users can also send and receive any currency through the wallet.

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What has been the result of this experiment?

nayib bukele has affirmed several times that the decision has helped in the economic improvement of the country with greater access to financial services.

Furthermore, El Salvador’s tourism minister stated that the adoption of bitcoin has also boosted tourism in the country. he claimed that it has resulted in a 30 percent increase in the influx of tourists with 1.4 million people visiting the country.

el salvador also hosted several top central bankers and economists at a bitcoin meeting recently and discussed plans for bitcoin city.

despite the claims of the government and ministers, the country still experiences low gdp growth rates. GDP growth rates have not broken above the low single digits in the last two decades, with GDP growth in 2021 at 4.2%.

gdp growth in 2018 and 2019 was 2.4% each. compared to that the 2021 levels seem to be an improvement but it is worth noting that in making such assessments the year 2020 should be discounted due to covid and the pandemic which resulted in an economic slowdown after which all economies showed exceptional growth. .

It’s safe to say that more time and data would be needed to judge the bitcoin experiment in el salvador.

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