El Salvador Finance Minister Says Bitcoin Adoption Is Still Growing

July 29, 2022 7:11 pm Comments

One might think that El Salvador’s Bitcoin bet has gone wrong as the price of the asset has declined by over 50% since the country’s government had purchased it.

With that being said, it seems that the nation’s decision to adopt Bitcoin as legal tender is still working as mainstream adoption is continuing to grow despite the market slump.

The country’s finance minister states reasons for this growth include the fact that El Salvador’s unbanked population is truly taking advantage of this new financial asset.

Additionally, the embracement of digital assets has attracted a lot of tourism and investments that the country otherwise wouldn’t have received.

CoinDesk reports:

Alejandro Zelaya said in an interview with Bloomberg on Wednesday that bitcoin adoption has been beneficial to El Salvador’s unbanked population and also attracted tourism and investments.

“It’s a phenomenon that exists and is gaining ground and will continue to be around in the coming years,” he said.

From September last year to the start of this month, El Salvador has purchased 2,301 BTC for a total of $103.9 million.

As of the start of July, its portfolio was worth $46.6 million, a decline of over 55%. With the recent uptick in the crypto markets, the portfolio is now worth around $55.3 million.

El Salvador has faced criticism from mainstream financial institutions for its crypto adoption. In January, the International Monetary Fund (IMF) urged the country to discontinue bitcoin’s legal tender status.

The finance minister of El Salvador, Alejandro Zelaya, also compared this recent adoption to the advancement of websites and digital businesses in the past where there was a lot of fear.

With this comparison,  the same thing may be happening with crypto now as many still fear the use of these new technologies that could disrupt the existing financial system.

However, the minister explains that reality will soon set in and the existing growth data is proving that.

The country is apparently not done with its Bitcoin plans as it still plans to introduce a new $1 billion Bitcoin bond which it hopes to resume after the crypto market improves.

CoinGape reports:

As per the survey by the U.S. National Bureau of Economic Research, most consumers still prefer paying in hard currency over Bitcoin. But Zelaya continues to believe that digital tokens have a bigger role to play in the future. He said:

“We aren’t going to have results overnight. We can’t go to bed poor and wake up millionaires. New technologies have shown how people in previous years were afraid of things like websites and digital business, but it’s been shown through time that reality imposes itself”.

Zelaya said that the El Salvador government is planning to issue $1 billion in Bitcoin bonds, however, they would bring them at a time when the market conditions improve.

The El Salvador government is working to move ahead with its “Bitcoin City” plan and will launch some Bitcoin projects in the coming months.

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