This marked a historical day as El Salvador became the first country to adopt Bitcoin. El Salvador had its own currency called Salvadorian Colon. Due to a civil war from 1979 - 1992, the economy collapsed along with its currency. They adopted the US dollar in 2001 to stabilise their inflation, but it kind of backfired as the US federal reserve printed Trillions of dollars and El Salvador had to purchase it for their economy to function. 70% of El Salvador citizens are unbanked and their annual income was below 4000 $ in a year. Their poverty coupled with socio-political issues led millions to migrate to other countries for work. A quarter of their GDP are remittances from expats who pay very high fees for the transfer to exchanges like Western Union.
Bitcoin Beach - El Zonte
An anonymous philanthropist wanted to create a micro economy with bitcoin payments as an experiment and he contacted a Surfer named Michael. Who was living in a beach town called El Zonte. Micheal started educating and encouraging local communities on the working of financial systems. After initial reluctance youth embraced the idea and soon they had their first Bitcoin ATM. Adoption rose to 90% by the end of 2020.
Fast forward to 2021 June 5, in the Bitcoin Miami event, Strike payment app founder announced the Bitcoin Bill drafted by President Nayib Bukele. Pretty soon The bitcoin bill was passed with a 75% majority.
Noticeably the bill doesn’t force any citizens to use only bitcoin as there are already a couple of options with USD and Colon. The bill also guarantees immediate conversion to dollars at any given time. Implementation of govt ATMs supporting bitcoin as well. It clearly mentions there won't be any capital gains tax.
Como toda innovación, el proceso del #Bitcoin en El Salvador tiene una curva de aprendizaje. Todo camino hacia el futuro es así y no se logrará todo en un día, ni en un mes.— Nayib Bukele 🇸🇻 (@nayibbukele) September 6, 2021
Pero debemos romper los paradigmas del pasado. El Salvador tiene derecho a avanzar hacia el primer mundo.
The president also announced the use of volcanic heat as an energy source for Bitcoin mining. When Bitcoin had been criticised for the energy consumption and environmental reasons. There is a promise of permanent residency for anyone making an investment of 3 BTC.
Since the announcement and even after the implementation, there are diverging opinions and baseless FUD of Chaos in the mix, but we believe most of FUD is caused by the Dollar friendly parties like IMF and the world bank.
Network fee: 0.00000000 BTC pic.twitter.com/WmEUO471h4— Aaron van Wirdum (@AaronvanW) September 9, 2021
Aquí les dejo un ejemplo de lo que nos cuesta hacer envíos. WU cobro 10.58% en fees!!!!— Alfonsina Giardino (@Fonchi_ca) September 9, 2021
Esto en una sola transacción! @nayibbukele eres un genio aunque no les guste aceptarlo a los del 3% 😏 pic.twitter.com/W8xUinMbqu
Western Union to lose 400 Million $ in transaction fees - True P2P benefit
So what you are saying is that an impoverished group of people will save 400 million in bank fees- El Salvador bitcoin move could cost Western Union $400 million a year- https://t.co/RPVQB9BmW4— Bitcoin Beach (@Bitcoinbeach) September 9, 2021
Next in line seems to be Ukraine and Panama along with some of the South American Countries tilting in favour.
Panama pushing its own Crypto bill