- 7th September marks one year of El Salvador adopting BTC as legal tender.
- Amid BTC fall, the government still believes that BTC adoption will bring foreign investment, create new jobs and reduce their dependence on the US dollar.
- The Finance Minister says the government has not incurred a loss of $40 million as BTC was not sold.
The 7th of September 2022 marks one year since El Salvador adopted Bitcoin (BTC) as a legal tender by enforcing the Bitcoin law. However, since its adoption, the crypto king’s price has fallen by 65% in the last year, according to CoinGecko.
El Salvador is the first country in the world to adopt BTC as a legal tender after its leaders saw potential in adopting BTC.
El Salvador’s president, Nayib Bukele promised that the adoption of BTC would help 70% of the population who did not have access to banking services as of 2021. The Salvadoran government too believed that adopting BTC would allure foreign investments, create new jobs and shift their heavy reliance on the US Dollar.
However, BTC which was trading around an average of $46,000 on the 6th Sept 2021 is trading at $18,742, according to Coin Market Cap, at the time of writing. BTC is down more than 64% within a year. The El Salvadoran government as of now holds about 2,381 BTC which accumulates to $62 million, much less than what was spent on buying.
Although some industry observers, having considered the falling crypto prices, criticized the ongoing El Salvador BTC adoption as a failed Bitcoin experiment, the Finance Minister of El Salvador, Alejandro Zelaya thought otherwise.
While responding to a journalist at a press conference, who raised an allegation against the government that it had lost $40 million at the fall of BTC, Zelaya said:
I have said it repeatedly: A supposed loss of 40 million dollars has not occurred because we have not sold the coins.
Bram Cohen, the creator of BitTorrent and founder of Chia Network, took to Twitter and said that benefits received cannot always be reflected by the monetary terms or the money it generates. He pointed this out while referring to the cut-down rates of banks with the emergence of cheaper bitcoin transactions.
The lesson is that the amount of good something does isn’t very correlated with the amount of money it makes. Sometimes a product can cause massive gains in overall market efficiency while barely making a penny.
— Bram Cohen🌱 (@bramcohen) September 6, 2022
According to El Salvador’s Reserve Bank, more than $50 million was sent by expat-Salvadorians through remittances within the space of January to May 2022.
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