El Salvador recently underwent through elections, which resulted in Nayib Bukele being re-elected for another term. This re-election is being described by mainstream media as a “landslide victory”. It shows the strong belief that the people have for their leader, which amassed 80+% of voting power. Much of his popularity comes from making El Salvador a safer country. Nayib Bukele is known for having initiated a massive crackdown on gangs. This stopped El Salvador from being labeled as one of the most dangerous countries in the west. According to several sources, their homicide rate decreased somewhere between 50 to 70%.
Nayib Bukele is also known for something completely out of the ordinary – his love for crypto.
Being a known believer in crypto since he was a mayor, Nayib eventually made Bitcoin legal tender in his country, once president, in 2021. What started as an experiment on one part of the country in 2019 eventually expanded to become a payment method that has to be accepted by all merchants in El Salvador.
With the Bitcoin Law, the government wanted to essentially increase financial inclusion in a country where many are unbanked. To kickstart this, the government created a wallet and airdropped 30$ in BTC to new signups. They also purchased Bitcoin several times in the months after the law was passed. While there’s no official public record of purchases, it is estimated that the government now owns 2827 BTC with an unrealized profit of around 1% at the time of writing.
But not everything was sunshine and rainbows in this path.
Usage of crypto in the country was and still remains very low, estimated under 12% for 2023, having decreased from previous year. Access to smartphones and internet is also a problem in the country. And those who had the means of installing Chivo were faced with hack attempts. Another issue faced is illiteracy, both on tech in general, and crypto in particular. This has led to protests against the Bitcoin Law, given lack of understanding of what it is. In the end, the vast majority of people prefer to use USD as they always did.
All these issues call for a change. Re-electing the president is extremely bullish for Bitcoin all over the world. But the government can’t just deploy the tools and hope for the best. Educating the population is a requirement. This prompted the government to plan for education initiatives about Bitcoin. Hopefully this will teach more people about the advantages of being their own bank, and make people see beyond the coin’s volatility.
El Salvador is in the best position possible to show the world how you can switch a country around to being self sovereign about their money, and avoid inflation and dependency on the dollar. Whenever they align the law with their tech and education initiatives, they might just pave the path for other countries to follow!
Here at AmaZix we fully support self sovereignty and self custody. It is part of our ethos and it is good to see the effort of the El Salvador government. If you also align with this ethos, we definitely want to work together with you, and your community. Reach out to us to get to know how we can help