- El Salvador shifts away from external debt, relying on Bitcoin and investments.
- The country secured a $1.6B investment from Yilport to modernize ports and boost Bitcoin City.
- El Salvador’s Bitcoin reserves have grown to 5,870 BTC.
El Salvador has taken a bold step in its fiscal policy, with President Nayib Bukele declaring the country will no longer rely on external debt to fund its budget.
Under Bukele’s leadership, the Central American nation has been integrating Bitcoin into its national economy. It became the first country in the world to make Bitcoin legal tender; on September 7, 2021.
Draft Legislation to Further Integrate Bitcoin
In line with this shift, El Salvador introduced draft legislation in June 2024 to incorporate digital assets further into its banking system. The proposed law would allow the creation of private investment banks dealing in Bitcoin and other cryptocurrencies, marking another step in the country’s digital financial revolution.
Recently, El Salvador secured a major $1.6 billion investment from Turkish company Yilport Holdings, which will modernize the ports of Acajutla and La Unión. La Unión, in particular, is set to become the site of the country’s ambitious Bitcoin City project. This deal, the largest private investment in El Salvador’s history, represents the third phase of a broader economic development plan focused on boosting trade and infrastructure.
Bitcoin Adoption and Growing Reserves
While El Salvador faces challenges in achieving widespread Bitcoin adoption, the government continues to expand its cryptocurrency reserves. The country’s Bitcoin holdings increased in August, reaching 5,870 BTC by September 1. Additionally, the government has mined nearly 474 bitcoins using geothermal energy from its volcanoes, enhancing its image as a sustainable Bitcoin miner. This brings the total value of its Bitcoin portfolio to approximately $354 million.
Read also: El Salvador Applauds Boltz’s Chain Swaps, Strengthening Bitcoin Innovation
Crypto experts like James Murphy note that Bitcoin has proven to be a valuable treasury asset for leaders like President Bukele, even with market volatility. El Salvador’s commitment to Bitcoin, coupled with its efforts to attract investment, underscores its long-term vision of integrating digital assets into its economic future.
Bitcoin is currently trading at $58,732, reflecting a 2.11% intraday dip, per Coincodex data.
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