El Salvador was the first country in the world to adopt Bitcoin as legal tender. How has that decision panned out for the country so far? Covered: El Salvador Economic Growth Metrics Future Plans For The Bitcoin Country Live footage of the IMF urging El Salvador to remove Bitcoin as legal tender pic.twitter.com/djWGnEYSvk — Bitcoin […] The post What The Numbers Tell Us About El Salvador’s Bitcoin Experiment appeared first on CryptosRus.

What The Numbers Tell Us About El Salvador’s Bitcoin Experiment

El Salvador was the first country in the world to adopt Bitcoin as legal tender. How has that decision panned out for the country so far?

Covered:

  • El Salvador Economic Growth Metrics
  • Future Plans For The Bitcoin Country

Despite the scorn coming from traditional economic institutions like the International Monetary Fund (IMF), El Salvador has stayed true to its mission to fully integrate Bitcoin into the country’s economy. Now that the experiment has had nearly half a year to run, some of the numbers are coming in to show us just how effective the shift to Bitcoin has been.

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El Salvador Economic Growth

If you’re unaware, nearly a quarter of El Salvador’s gross domestic product (GDP) is made up of remittance payments sent from abroad, with the country receiving $6 billion in remittances in 2020.

Prior to Bitcoin, Salvadoran families had to send their money through Western Union to reach their family’s bank accounts in El Salvador, however, now that participants can send Bitcoin anywhere in the world instantly thanks to the Lightning Network, a report from CNBC projected that using Bitcoin to send money rather than Western Union will end up saving the nation more than $400 million per year.

The savings from the slashed transfer fees seem to have been paying off as well, as El Salvador’s GDP is steadily climbing after the onslaught of the coronavirus pandemic.

Now, there are a lot of reports floating around on Twitter today claiming that El Salvador’s GDP has grown by 10.3% since adopting Bitcoin as legal tender. While the fact may be true that the GDP rose by 10.3%, claiming that the growth is entirely based on the country’s shift to Bitcoin is a bit misleading.

I think it’s still worth showing this data, as it gives a good idea as to the current economic situation in El Salvador, but don’t assume that the country’s growth is entirely thanks to Bitcoin. Nearly every country took an economic hit from the pandemic, so it’s hard to pinpoint where exactly the growth is stemming from. Regardless, the savings that El Salvador can realize from Bitcoin adoption is certain to help out the country’s economic situation — just don’t go trusting every source you hear on Twitter.

Some data that may have a more direct correlation to Bitcoin, on the other hand, is the amount of tourism happening in El Salvador now. Tourism is up more than 30% since adopting Bitcoin as legal tender, according to El Salvador’s Tourism Minister Morena Valdez.

Now, this metric I can certainly see as being highly correlated to Bitcoin. The country is getting the spotlight attention and love it needs from Bitcoiners online, sending flocks of people to the country to experience what the country has to offer. While there’s no telling how sustainable this growth will be over time, an improving economic landscape thanks to Bitcoin could make the nation a more desirable location for tourists.

Everything in perfect balance, right?

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Future Plans For The Bitcoin Country

El Salvador has no intentions of turning back on its Bitcoin plans, and in fact, the list of future developments keeps growing. With the excess funds generated from using Bitcoin, it looks like president Nayib Bukele is planning on bringing Hollywood to El Salvador.

Beyond the film industry, however, Bukele is also focused on education in El Salvador. He’s planning on building 20 new “Bitcoin schools” in the country thanks to the surplus generated from the crypto asset.

“When this project was done we had not earned as much money in FIDEBITCOIN as we have now. So we have decided to make the first 20 Bitcoin Schools.”

Lastly, Nayib Bukele is gearing up to build the first “Bitcoin city,” and unlike plans from mayors like Francisco Suarez in Miami, Bukele wants this city to be structured in true Bitcoin fashion:

  • 0% income tax
  • 0% capital gains tax
  • 0% property tax
  • 0% payroll tax
  • 0% municipal taxes
  • 0% CO2 emissions

 

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