Do you know how many countries have Bitcoin as legal tender?
Well, for now only two: the Central African Republic and El Salvador, who has been the pioneer in taking this first big step.
More than two years ago, at the end of 2021, Nayib Bukele became the first president in the world to promote and approve the use of bitcoin as legal tender.
Nayib Armando Bukele Ortez is a Latin American politician and businessman, as well as the current president of the Central American country El Salvador.
He is best known for being the first global leader to support the adoption of bitcoin. Likewise, it stands out for its fight against gangs at the national level, its outstanding popularity among the population and its controversial government. But this topic has already been discussed a lot on other internet sites.
Bukele and cryptocurrencies
In the cryptocurrency community, Bukele enjoys some popularity due to his support for bitcoin, the adoption of the currency as legal tender in El Salvador, and his government's constant purchases of BTC.
Although it is not the country with the largest holdings of bitcoin, it is one of the first that has adopted the investment of the asset as part of its economic measures.
There is no public information that Nayib Bukele has acquired bitcoin for personal use. But one of his government's main strategies has been the constant acquisition of bitcoins for the country's reserve. According to data from BitcoinTreasuries, El Salvador is the fourth country with the largest bitcoin reserves in the world.
This country has almost 3,000 BTC in its assets, meaning an investment of more than 100 million dollars.
This amount of coins have been accumulated in multiple million-dollar purchases made by the State and the president, as well as a plan to acquire one bitcoin a day since the end of November 2022.
How Bitcoin arrived
On June 5, 2021, the president first introduced the bill to make bitcoin legal tender. The project was approved and officially accepted on September 7.
“The Bitcoin Law” legally allowed the use of bitcoin as a payment and exchange method throughout the country. Since then, BTC mining with volcanic energy and the sale of bonds anchored to the price of bitcoin have been permitted.
In this way, the government proposed becoming an investment option for foreign bitcoiners. As if that were not enough, among the economic policies adopted by Nayib Bukele's cabinet, the systematic purchase of bitcoins as the country's reserve stands out.
Under this concept, at a legal level, bitcoin would have the same monetary importance as the US dollar in El Salvador.
A measure that would allow the nation greater economic independence from the United States and appears to be one of the main reasons for the adoption of cryptocurrency. In this regard, Bukele has pointed out that the uncontrolled printing of the dollar by the Federal Reserve makes it difficult to use this currency as a reserve of value. In this sense, he saw an option in bitcoin.
How much money has Nayib Bukele and El Salvador lost or gained with bitcoin?
With all the hype that Bitcoin has had us in for months, this question is more than valid.
It is difficult to calculate the total gained or lost in the El Salvador bitcoin investment strategy. This is because the value of bitcoin varies second by second according to supply and demand, so the percentage of return is always changing.
For example, by the end of 2022, it was estimated that El Salvador had unrealized losses in the order of $60 million on its bitcoin purchases. However, by early 2024, these metrics have reversed and El Salvador's reserves have reported periods of gains.
Is it possible that other countries will adopt Bitcoin as legal tender in the wake of this?
Everything we have talked about has undoubtedly opened the door to the possibility of other countries following their example.
Only the Central African Republic recently joined. We cannot project definitive conclusions, but there are several factors that could influence other governments' decision to adopt Bitcoin:
1. The success or failure of the experience in El Salvador: El Salvador is still in the early stages of Bitcoin adoption (even though it's been two years now) and the success or failure of its experiment will be closely watched by other countries. If Bitcoin has a positive impact on the Salvadoran economy, other countries will likely be encouraged to follow suit.
2. The evolution of the price of Bitcoin: Bitcoin's volatility is one of the main obstacles to its adoption as legal tender. If the price of Bitcoin continues to be very volatile, governments will be reluctant to accept it for fear of economic instability.
3. International regulations on cryptocurrencies: Currently, there is no clear international regulatory framework for cryptocurrencies except that the USA is in a process that appears to be quite promising. If international regulations are established that provide greater clarity and legal certainty, governments will be more likely to adopt Bitcoin.
The legalization of cryptocurrencies in the United States could have a significant impact on the adoption of Bitcoin by other countries. If the United States legalizes and regulates cryptocurrencies, this could send a very powerful signal, considering the weight of the USA in the global market.
Conclusion
Some countries may begin by accepting Bitcoin as a legal form of payment for certain services or transactions, before adopting it as full legal tender.
We may see greater adoption in specific regions, such as Latin America or Africa, where the population may be more open to new technologies (also because they have more limited access options compared to Europe, for example) as well as smaller countries with smaller economies. developed.
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For this article, prompts have been used to request information
interpreted and provided by AI (Google Bard). Written and edited
by Kevin David Terán and verified by Pedro Arizaleta and Erwin Sánchez
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