El Salvador is celebrating its first anniversary with Bitcoin (BTC) as a legal tender. Back in the bull market of 2021, the president of the country Nayib Bukele announced that the country wanted to make Bitcoin a legal tender currency besides the U.S. dollar (USD). A year later, financial institutions continue to attack El Salvador for this decision. But the reality in the country is quite different and has allowed people to get access to better and more reliable financial services.
The First Year of Bitcoin Legal Tender in El Salvador
Bitcoin has been working as a legal tender currency in El Salvador for an entire year. People in the country are now able to use Bitcoin alongside the U.S. dollar for purchases of goods and services. At the same time, several projects were proposed by the president of the country, including a public veterinary hospital and a Bitcoin city powered with energy from volcanoes.
This was the first country in the world to make Bitcoin legal tender. This example was then followed by the Central African Republic (CAR). Therefore, there are now two countries in the world that made Bitcoin legal tender and that try to rely less on fiat currencies.
El Salvador relied on the U.S. dollar and the Central African Republic on a currency that was tied to the Euro, the second-largest fiat currency in the world. Therefore, these are countries that were searching for another type of currency rather than a fiat option.
The governor of Lugano, one of the largest financial centres in Switzerland, wrote on Twitter that they are excited to follow El Salvador’s amazing journey with Bitcoin.
“Congratulations to President Nayib Bukele and all El Salvador citizens for the first anniversary of the Bitcoin law. Lugano is excited to follow this amazing journey, sharing our experiences. At @luganomycity we are waiting for @MilenaMayorga for the Lugano PlanB Forum.”
Therefore, there are other cities that are interested in applying El Salvador’s experience with Bitcoin or at least learning from it. Lugano could be a neuralgic point between Zurich and Milan with people coming from near cities such as Zug.
El Salvador has also received a large influx of tourists that want to try the “Bitcoin experience.” El Zonte became one of the most popular destinations for tourists after San Salvador. Furthermore, Bitcoin became a great option for people that received funds from the family in other countries.
Companies such as Western Union or Money Gram were keeping between 2% to 15% of the funds transferred by people living abroad to Salvadorans. Therefore, Bitcoin became a great option for families to avoid paying high fees to financial companies. This was possible thanks to using Bitcoin for processing cross-border payments and transfers.
In the future, we could see more countries adopting Bitcoin as legal tender. This would require infrastructure to be built around Bitcoin. However, the next country or city should also take into consideration that there could be attacks by financial institutions from all over the world, including the International Monetary Fund (IMF) or the Bank for International Settlements (BIS).