El Salvador’s Bitcoin Adoption is On Track – Finance Minister

El Salvador’s Bitcoin Adoption is On Track – Finance Minister

July 29, 2022 0 By Jeanine Sanchez

It’s now almost a year since the government of El Salvador made Bitcoin one of the country’s legal tender. It comes side-by-side with the US Dollar which is officially in use in the country. 

Governmental Optimism

The Finance Minister of El Salvador, Alejandro Zelaya, said the Bitcoin plan is going accordingly. In his words, it is working fine enough.

Zelaya added that Bitcoin has aided their goal of bringing financial literacy to an unbanked set of people. And at the same time, the country is attracting investment and tourism. He, however, added that the utility of Bitcoin in the process of trade is relatively low.

But the government of El Salvador will still go ahead to issue a bond backed up by Bitcoin, he said. The bond issuance in view will also be built on blockchain technology. Zelaya spoke with Bloomberg in an extensive interview on Wednesday.

He said some people don’t understand Bitcoin yet as it is entirely new to them. But it is a thing that now exists and increasing in popularity, and it will be available for years to come.

The Markets and Reality on the Ground

Over the past year, El Salvador bought 2,381 Bitcoin assets to form part of its funds. But they are currently existing at a 50% loss in comparison to their purchase cost. This is largely a result of the current market downturn in the crypto sector. 

The US National Bureau of Economic Research carried out a survey that shows most people rather transact in hard currencies. Zelaya, however, believes in the bigger role digital tokens have to play in the future. He said results are not going to come overnight.

It is not possible to go to bed poor and wake in the morning as a millionaire. Zelaya went ahead to explain how people were previously afraid of new technologies in the past. But over time, we have seen that reality gets to impose itself.

Zelaya said the government of El Salvador plans to issue Bitcoin bonds worth $1 billion. But this is a project for when the crypto market condition improves. 

The government of El Salvador is going on with work on the “Bitcoin City.” It is also scheduled to launch a number of new Bitcoin projects in months to come.