El Salvador’s Vice-President Attributes Country’s Economic Rebirth to Bitcoin Adoption

Author

Trent Alan

Author

Trent Alan

About Author

Trent has a background and education in journalism and communications, with two decades of experience editing and writing on a diverse array of topics. In recent years, however, he has shifted his...

Author Profile

Share

Copied

Last updated:

October 23, 2023 04:24 EDT

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Ad Disclosure

We believe in full transparency with our readers. Some of our content includes affiliate links, and we may earn a commission through these partnerships. Read more

In an interview with Forbes on Sunday, El Salvador’s Vice-President Ulloa credited the nation’s recent economic resurgence to its adoption of Bitcoin as legal tender.

This comes after various reports have highlighted positive impacts on the country‘s economy, security, and tourism, all influenced by the cryptocurrency.

Bitcoin’s Influence on El Salvador’s Bonds and Investment

Last July, Bloomberg reported that despite initial concerns over El Salvador’s Bitcoin adoption in 2021, Wall Street investors have shown increasing interest in the country’s bonds. The bonds have yielded a return of 70% in 2023, outperforming other emerging markets. 

🗣️Many countries will adopt the El Salvador model !!!! https://t.co/LrJy6KA2KH

— CryptoHistory ₿ (@Crypto_HistoryB) October 16, 2023

For example, despite a 180% return on its position, Converium Capital Inc. chose to maintain its investment. Vice-President Ulloa clarified that this is not coincidental. 

“It’s the result of applying a financial policy from the government of the president Nayib Bukele, exercised by our entities in charge,” he stated.

Ulloa further explained that the Bitcoin Law enacted by the country was an important factor in changing El Salvador’s global standing. Despite initial objections from some multilateral organizations, the country attracted a slew of investors, particularly in the digital economy. 

According to Ulloa, more than 80 Bitcoin-focused companies are either operating in El Salvador or have plans to expand there.

Security Policies and Technological Partnerships

El Salvador’s approach to technological innovation and its strict policies against gang violence have caught the attention of tech giants like Google and Meta. Both companies have plans to collaborate with the Salvadoran government. 

Don't just follow the crowd – El Salvador has taken a bold move to adopt #Bitcoin as legal tender, defying international authorities. A reminder that #DeFi is all about innovation & pushing the boundaries – who knows what's possible for the future! #Crypto #Ethereum

— BitGraf (@Bit_Graf) October 16, 2023

According to Ulloa, the collaboration will modernize and digitalize the government of Salvador, and battle corruption.

According to both Santander Markets and Vice-President Ulloa, Bitcoin adoption has been a major driver for the surge in tourism in El Salvador. Tourists find it convenient to pay for goods and services without the hassle of currency exchanges. 

“Without a doubt, tourism and the use of digital currencies go hand in hand and are a sign of that future and the rebirth of our country,” Ulloa emphasized.

The conversation surrounding Bitcoin and cryptocurrency has largely centered on individual and institutional adoption, often overlooking the potential for a broader, societal impact. El Salvador’s venture into Bitcoin adoption, as detailed by Vice-President Ulloa, provides a more comprehensive look at how a national embrace of digital currency could touch multiple facets of a country’s infrastructure—from its financial markets to its tourism industry. 

It also opens up discussions about the role of technology giants like Google and Meta in the governance structures of emerging economies. El Salvador’s experience offers a starting point for other nations to evaluate the pros and cons of integrating digital currencies into their economic and governance systems.