El Salvador President Nayib Bukele, who passed a law making Bitcoin legal as a legal currency in the Latin American country, said such currency experiments have had mixed results so far.
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“It hasn’t been as widely adopted as we had hoped. A lot of Salvadorans use it. Most of the big companies in the country have it,” Bukele said in a wide-ranging interview. Time Magazine To the question of whether Bitcoin monetization was “successful”
“The positive side is that it is voluntary. We have never forced anyone to adopt it. We have made it optional, and those who have chosen to use it have benefited from the rise of Bitcoin,” he added. “I expected more adoption, but we have always prided ourselves on being a free country, free in every way.”
On September 7, 2021, El Salvador became the first country to adopt Bitcoin as an alternative legal tender in an effort to digitize its economy and reduce its reliance on the U.S. dollar, the country’s most widely used currency, thanks to the so-called Bitcoin Law, which was passed during the height of the last bull market.
At launch, the government spent $75 million to distribute about $30 worth of Bitcoin to people who registered for the state-backed Chivo wallet. The country has also added Bitcoin as a long-term treasury asset and plans to build a nationalized Bitcoin mine powered by a volcano.
Bukele noted that “people who saved in bitcoin” are likely now seeing a decent return as the price of bitcoin approaches its all-time high. “Thank God for that. It’s good that people are getting that income. People who decided not to use it didn’t get that return,” he said.
“I wouldn’t say it’s the currency of the future, but there’s a lot of future in it,” Bukele said, noting the growing influence of Wall Street firms in the cryptocurrency industry and the fact that bitcoin has become a campaign issue in the U.S. election.
Bukele’s plans, which some praise as a “philosopher king” and others denounce as “authoritarian,” have drawn skepticism from domestic and international critics. Moody’s, for example, downgraded the country’s credit rating, citing Bukele’s fiscal policies. But Bukele said the International Monetary Fund (IMF) has softened its critical stance on the policies and pointed out the expected risks.It didn’t come true” .
Despite limited success in domestic adoption, Bukele noted that Bitcoin has improved El Salvador’s “branding,” attracted foreign investment, and led to a surge in tourism. Several Bitcoin companies have offices or headquarters in the country.
“Ultimately, I think being the ‘first mover’ gives us a small advantage. I think we could have done a lot better. I don’t think it’s a huge success,” Bukele said. “But I think the positives outweigh the negatives, and the issues highlighted are relatively minor.”
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