Bitcoin
The president of El Salvador wants to use Bitcoin for national projects. Here are six ways how – DL News
- President Nayib Bukele continues to lay the groundwork for Bitcoin adoption in El Salvador.
- DL News has listed the Bitcoin projects Bukele has announced so far.
Love him or hate him, there is no denying that El Salvador’s president, Nayib Bukele, is imaginative.
Bukele shook the world when he announced in 2021 that El Salvador would make Bitcoin legal tender – giving the cryptocurrency the same status as the US dollar in the country.
Since then, Bukele has signed several other Bitcoin-related projects. Here’s what we know so far.
Bitcoin Treasury
One of Bukele’s first decrees was for El Salvador to make Bitcoin part of its Treasury assets.
The government began purchasing Bitcoin semi-regularly in October 2021.
After spending most of the bear market in the red, El Salvador started to be profitable on its investment last December when Bitcoin broke $41,000.
El Salvador is now in possession of 5,787 Bitcoins, worth more than $376 million, according to the official government dashboard.
Chivo
Another early initiative was the state-sanctioned Bitcoin wallet, Chivo.
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Salvadorans received $30 in Bitcoin as an incentive to sign up.
In theory, they can use these wallets to pay for goods and services in Bitcoin anywhere in the country.
In practice, however, adoption has been slow, with Bukele’s alma mater, the Central American University, meet in January that 88% of Salvadorans surveyed had not used Bitcoin in 2023.
Volcano Titles
Bukele also promised to issue $1 Billion in Bitcoin-Backed Bonds in November 2021.
El Salvador plans to allocate half of the proceeds to infrastructure – such as volcano-powered Bitcoin mining – and invest the rest in Bitcoin.
Volcano Bonds were initially scheduled to launch in March 2022, but were delayed due to regulatory uncertainty and the Bitcoin bear market.
The government’s Bitcoin Office announced last December that the bonds would be issued in the first quarter of 2024. It has not yet done so.
Bitcoin City
One of Bukele’s most ambitious projects is the planned construction of Bitcoin City – a futuristic, circular metropolis he intends to build at the base of the Conchagua volcano, on the country’s eastern border.
Bitcoin City will be financed with resources from the Volcano Bond and will harness geothermal energy, Bukele announced in November 2021.
The metropolis will have residential areas, commercial districts, services, museums, entertainment venues, bars, restaurants, airport, port and railway services,
Construction has not yet started.
Bitcoin Citizenship
El Salvador also launched a citizenship program aimed at Bitcoin investors.
The Freedom Visa allows applicants to pay $1 million in Bitcoin or Tether to obtain lifetime residency status and a path to Salvadoran citizenship.
Only 1,000 of these visas are granted each year.
Bitcoin Bank
Earlier this month, Bukele proposed the establishment of a private investment bank that would offer broad services to Bitcoin holders.
The project is part of a larger plan to reform the banking system in the country. The reform aims to facilitate the creation of new businesses and government projects and attract “sophisticated” foreign investors.
According to Bukele’s advisor, Max Keizer, the bank will allow customers use Bitcoin as collateral for their loans.
DL News was unable to reach Bukele for comment.
Tom Carreras writes for DL News from Latin America. Do you have any tips about Bitcoin and El Salvador? Contact tcarreras@dlnews.com