El Salvador’s adoption of bitcoin as a legal tender has not only fixed the country’s legacy but has also had a significant positive impact on its tourism sector.
According to President Nayib Bukele, in an interview with Tucker Carlson, the tourism industry has increased by 95% since the country embraced Bitcoin.
El Salvador’s ‘Bitcoin Beach’ increases tourism
“We have increased tourism by 95%, and that’s in part because of Bitcoin,” he said. “There’s a lot of Bitcoiners that want to go to the country where bitcoin is legal tender, we have bitcoin conferences,” said Bukele.
The Minister of Tourism, Morena Valdez, also confirmed that the local tourism industry went up by 30% in the first three months after the adoption of Bitcoin.
Following the 2021-2022 cryptocurrency crash, however, the value of bitcoin dropped by 70% compared to November 2021. During that time, President Bukele had invested approximately US$150 million, which was equivalent to 4% of El Salvador’s national reserves, into Bitcoin. In an attempt to manage the cryptocurrency market’s volatility, Bukele frequently announced on Twitter that he was “buying the dip.” In June 2022, he purchased an additional 80 Bitcoins.
Bitcoin has rebranded El Salvador’s image
Apart from the positive impact on tourism, Bukele maintained that El Salvador has received a lot of private investments since adopting bitcoin as legal tender. He argued that the adoption has brought about the rebranding of the country’s legacy, which was once known as one of the most violent places in the world.
The Central American state had reached a peak of 103 killings per 100,000 residents a few years ago. However, with the adoption of Bitcoin, the country has been able to shift its focus to more positive initiatives, attracting investors and tourists alike, with Bukele crediting Bitcoin for helping to rebrand the country.
Bukele’s praise for Bitcoin also stemmed from his criticism of central banks’ actions, such as the US Federal Reserve, which he blamed for devaluing people’s wealth and erasing their savings, prompting consumers to look towards decentralized financial instruments.
Bitcoin as a geopolitical force
“You can’t ban it. It’s uncensorable,” Bukele added.
Bukele’s stance on the benefits of Bitcoin is in line with the growing interest in cryptocurrencies globally. The adoption of cryptocurrencies as a legitimate means of payment is on the rise, with countries such as Ukraine, Nigeria, and Venezuela also exploring the idea of adopting digital currencies.
However, the adoption of bitcoin in El Salvador has not been without controversy. Critics have raised concerns about the cryptocurrency’s volatility, which can lead to a lack of stability in the country’s economy, Bukele admitted.
Some have also criticized Bukele’s decision to adopt bitcoin as an attempt to gain favor with the country’s large population of young people, who are more open to the use of digital currencies. Add to that concerns that the adoption of Bitcoin may not be a long-term solution to the country’s economic problems, and its plummeting price since El Salvator invested in the cryptocurrency.
Despite the criticism, Bukele remains bullish on the prospects of bitcoin, and the positive impact it can have on the country’s economy. He told Carlson that the adoption of Bitcoin has ultimately been a game-changer for the country, and predicted other countries will soon follow suit.
“El Salvador is leading the world in terms of cryptocurrencies. We are making history, and other countries will soon follow.”
