- In an interview with Time Magazine, El Salvador’s President Nayib Bukele said the Central American nation’s adoption of Bitcoin as legal tender has been slower than he expected.
- Despite not being embraced as enthusiastically as hoped, Bukele still says the crypto experiment has been a success, pointing to government profits of US$265 million.
- El Salvador first adopted Bitcoin as legal tender in 2021, a move that attracted much criticism including from the IMF, which warned the move presented more risks than potential benefits.
In an interview with Time Magazine published yesterday, El Salvador’s President Nayib Bukele said that adoption of Bitcoin in the Central American nation has been slower than expected, yet there haven’t been any negatives to Bitcoin’s introduction as legal tender.
Bitcoin was first made legal tender in El Salvador to much fanfare in 2021, but the majority of citizens haven’t taken much interest in the new-fangled currency, preferring to stick with the nation’s primary currency, the US dollar.
Bukele says despite the slow rate of adoption, the nation has benefitted in numerous ways from its Bitcoin experiment—the most obvious being the government’s US$265 million (AU$390m) profit on its US$135 million (AU$198m) Bitcoin investment. Bukele says other benefits of Bitcoin have included a boost to tourism and increased investment.
Related: Analysts Point to Returning “Appetite” for Bitcoin Amid Change in Market Sentiment
Bitcoin Introduction a Mixed Bag, Says Bukele
When Time asked Bukele if he thought the introduction of Bitcoin as legal tender had been a success, he responded that the results have been mixed:
Yes and no; a lot more could definitely be done. Bitcoin hasn’t had the widespread adoption we hoped for.
Nayib Bukele, President of El SalvadorBukele said that many larger businesses, such as McDonald’s, supermarkets and hotels, allow customers to pay with Bitcoin, but the uptake with small businesses has been slow.
The Salvadoran president also claimed that Bitcoin was only ever intended to be just another payment option, adding that citizens have never been forced or coerced into using it. The president also seemed to suggest he doesn’t think Bitcoin will ever become the dominant currency in El Salvador:
I’m not going to say it’s the currency of the future, but there’s a lot of future in that currency.
Nayib Bukele, President of El SalvadorOverall Bukele seemed mildly disappointed with the state of the nation’s Bitcoin experiment while remaining hopeful of further adoption, saying:
I feel that it could have worked better, and there is still time to make some improvements, but it hasn’t resulted in anything negative. On the contrary, it gave us branding, it brought us investments, it brought us tourism.
Nayib Bukele, President of El SalvadorEl Salvador Benefits Financially from Bitcoin Investments
Bukele says that the El Salvador government has done particularly well from its Bitcoin investments, but many everyday Salvadorans have also benefitted as the price of the OG crypto has surged in the last three years:
El Salvador invested $135 million. Now, we have $400 million in Bitcoin in the public wallet alone. We have done well as a government. Salvadorans who used and saved it have done very well for obvious reasons, such as the price increase.
Nayib Bukele, President of El SalvadorBukele also suggests his government’s adoption of Bitcoin has played a role in the recent embrace of digital assets by traditional financial players, such as BlackRock, saying “the fact that major Wall Street companies are now engaging in it—something that seemed unthinkable three years ago when we did it—shows its impact.”
The Salvadoran president added that his policies have made strategic Bitcoin reserves a topic of political debate around the world, including in the US:
Some countries already hold reserves in Bitcoin or are investing in Bitcoin and Bitcoin mining. It is already becoming a topic of debate in the US presidential campaign.
Nayib Bukele, President of El SalvadorRelated: IMF Shifts Crypto Policy Stance, Highlights Progress in El Salvador
He seized the opportunity to take a stab at the International Monetary Fund (IMF), pointing out that it had recently admitted the risks of El Salvador’s flirtation with crypto it warned of in 2021 had not eventuated:
Even the International Monetary Fund itself stated in its report last year, ‘The risks of Bitcoin in El Salvador have not materialized,’ meaning the risks they anticipated did not come to pass.
Nayib Bukele, President of El SalvadorCredit: Source link
