On September 7, 2021, El Salvador became the first nation in the world to accept Bitcoin as a legal tender within the country. One year later, El Salvador celebrates its first anniversary and reflects upon the road it traveled to get there and the benefits and reactions to its decision.
Celebrating One Year after Bitcoin´s Adoption
One year ago, El Salvador President Nayib Bukele told the nation´s population that Bitcoin´s adoption as a legal tender would help residents access finances and positively affect international investment. In addition, this plan also touted the benefits of reducing the nation´s dependency on the U.S. dollar and generating new jobs.
September 7 is the official anniversary of El Salvador becoming the first country in the world to adopt Bitcoin as a legal tender. After one year, the world reflects on this decision—with opinions mixed. Some call El Salvador´s efforts an “utter failure,” while others call it a “resounding success.”
Although not everyone was on board with these plans, the world cannot contradict the fact that El Salvador has shown “incredible growth” over the past year.
A Rocky Road Towards Adoption and Afterward
The road toward Bitcoin´s adoption in El Salvador was not an easy one. Individuals and entities have expressed both “excitement” and “hostility.” Those against the adoption, such as retirees, feared receiving their pensions in Bitcoin instead of dollars. Those in favor noted how the adoption could rejuvenate the economy.
Some reports even noted that as much as 70% of the population was against the nation´s adoption of Bitcoin as a legal tender. Even the International Monetary Fund was against this plan.
Bitcoin´s Effects on El Salvador and Internationally
Many individuals are deep proponents of El Salvador´s move. MicroStrategy CEO Michael Saylor and Human Rights Foundation chief strategy officer Alex Gladstein have supported El Salvador´s plan.
Executive director of crypto exchange CEX.IO Konstantin Anissimov told Cointelegraph that El Salvador’s adoption of Bitcoin “validates BTC as a currency.” Anissimov noted that Bitcoin helps other countries with weak economies in the financial industry. He continued,
The big advantage Bitcoin will have for these economies is that they will not have any debt to pay to anyone. It also means that these countries will offer excellent opportunities for the adoption of cryptocurrencies and crypto startups. This will eventually boost taxation and can become a growth point for this country.
El Salvador President Nayib Bukele has long promised that Bitcoin´s adoption in the nation would benefit the population and the residents, especially those that lack access to banking services.
President Bukele asserted that the adoption would benefit 70% of the local population.
El Salvador´s Bitcoin Adoption and the Effects on Tourism
For some time, the Salvadoran government promoted the adoption of Bitcoin as “a tool to attract foreign investment, create new jobs, and cut reliance on the U.S. dollar in the country’s economy.”
Despite the ups and downs of Bitcoin´s price, the tourism industry has also benefited. Cointelegraph previously reported that tourism in the nation “has soared in the first half of 2022, surging about 82% as 1.1 million tourists have flocked to the country this year.”
The World Travel Organization reports that El Salvador is now “one of the countries with the best rate of tourism recovery in the region as of January 2022.” People have even moved to El Salvador due to Bitcoin adoption.
Looking to the Future
By 2025, other nations will adopt Bitcoin as a legal tender and follow El Salvador´s lead for their citizens, economies, and international investment. Some countries are studying El Salvador and Bitcoin´s effect on its economy to see how they can implement the same/similar plans within their borders.
As more foreigners travel to the nation to see this adoption, more initiatives are launched, such as projects relating to medicine, investment, and tourism—all of which help El Salvador´s economy.
El Salvador celebrates the first anniversary of officially adopting Bitcoin as a legal tender. Despite the bumps in the road, the adoption has proven to be an overall fruitful plan—despite Bitcoin´s volatility in price. Now, foreigners and other nations seek to replicate El Salvador´s programs to benefit their own countries, citizens, and overall economies.