In the eyes of many residents of El Salvador, the concept that cash is king was something they grew up with. Even older generations than today’s young and mobile population of this small Latin American country considered cash as the ultimate solution for all financial matters. However, over the previous year, a new concept slowly made its way into their lives. That is the concept of digital currency, more precisely bitcoin. Prior to that, the country made the same cryptocurrency its legal national tender. That equated it with its national currency and any other foreign fiat currency like the USD. Now, the same is in use across El Salvador in the same manner as any physical currency or traditional banking services.
Many residents report that it was hard to get used to bitcoin and its possibilities. But, at the present moment, many of them have their digital wallets. They are also using BTC tokens as a means of payment, money transactions, and many other similar financial dealings that prior to this were the stuff of national banks, private exchanges, and remittance services. At the same time, many residents in El Salvador never actually had any traditional banking service access, like a regular fiat account. All of this is making Salvadorians slowly take a shine to bitcoin, which the world notices the same. While it does, it decides in ever-bigger numbers to check out the same location and visit El Salvador. That process is gradually growing into a brand new field of the leisure industry – bitcoin tourism.
The process of bitcoin use in the economy of El Salvador is not something akin to a few businesses accepting BTC tokens. That exists across the world where any kind of company that accepts direct payments from goods and services can easily use services like BitPay. These platforms provide the ability to instantly convert any crypto-supported payment into one or another fiat currency. But, the situation in El Salvador is different. Starting in September 2021, when bitcoin acceptance became legal in the country, all businesses now have to accept bitcoin as legal tender.
So any venture that accepts payments in cash, for example, and has no terminal for debit and credit cards, still has to accept bitcoin as well. This is completely unique in the entire world and no other nation provides the same level of crypto support. However, the initiative of President Nayib Bukele is also changing the image of this nation and how the same region perceives itself, especially in terms of technological development, as well as the tourism capabilities that are not of a traditional nature.
The decision that the government and its president made in El Salvador is nothing short of historic. The law and bitcoin acceptance process already made headline news across the world, but the initiatives it offers continue to capture the imagination of the global audience. That is why the country plans to build its Bitcoin City, but also use the thermal energy of a volcano to power mining rigs that will generate its native bitcoin tokens. In terms of tourism, the country is seeing a boom in visitors, which coincides with the end of the COVID-19 pandemic and its serious travel restrictions.
According to some sources, the nation is witnessing a boost of 30 percent in regards to all of the visitors it receives. Many of those are immediately using the crypto wallets they have, without the need to convert to the local currency or use their USD or EUR holdings. That is a major benefit in the long run, but currently, it presents more of a gimmick. But, that gimmick is working very well for El Salvador’s tourism industry, which has a lot of untapped potential, all on account of the level of development in the nation.
El Salvador’s President is certain that the cryptocurrency used is the thing that will lift the same country out of poverty. Boosts to its leisure industry are only short-term benefits. Long-term ones will include things like the development and expansion of the tech industry. Bukele believes that this will turn the same nation into a regional hub for technology and tech research. He is also certain that other nations will follow its example, especially when it comes to South America.
Beach bars, like many other businesses in El Salvador, proudly display signs stating Aceptamos Bitcoin. That means, in Spanish, simply that the same venture accepts bitcoin as a means of payment. Luxurious hotels on the beach fronts are no different and concepts like Bitcoin Beach already are emerging in the country. Here, a flurry of building activity is creating new resorts and hoping to see even further tourist influx in the years to come.
Schools and educational centers are introducing classes on the same cryptocurrency, explaining to pupils both young and old how crypto can impact – and benefit – their lives. So, accepting bitcoin has provided a lot of headwinds for the small nation that was previously better known for its bloody civil war and currency’s high level of poverty. But, for the visitors and tourists that come to the nation, its currency reputation is far stronger than its previous one.
Challenges of Bitcoin
While the present influx of travelers to the shores of El Salvador seems to be without any drawbacks, the overall initiative of doubling down on bitcoin has its challenges. The nation plans to offer the world a chance to buy its bitcoin-backed bond, but it has a range of downsides. Many economists and investors paint these as deal-breakers and the rollout also continues to be marred by issues.
Also, some evidence points to the possibility that President Bukele is clamping down on opposition media, including those who are critical of his bitcoin experiment. Lastly, the level of corruption and mismanagement remains high on all levels. While tourism is presently booming thanks to esports players, crypto influences, and others who are visiting El Salvador, that will not be enough to move the country out of poverty.