Bitcoin adoption in El Salvador
The International Monetary Fund (IMF) criticized El Salvador’s decision to accept Bitcoin as a legal tender and strongly advised against it. The IMF report listed the drawbacks of Bitcoin as:
“[Bitcoin] entails large risks for financial and market integrity, financial stability, and consumer protection. It also can create contingent liabilities.”
However, the country dismissed the IMF’s warnings. The country’s president and the finance minister are strong pro-Bitcoiners who believe Bitcoin is the future.
Moreover, they claim Bitcoin reduces the country’s dependence on the U.S. Dollar, which is El Salvador’s only other official currency. However, after several months, this has yet to happen.
El Salvador also recently announced they have “deployed capital to purchase another 12.4 bitcoins”.
The country essentially went from buying thousands, to buying double digits. Tell me your country is bankrupt without telling me your country is going bankrupt.
In a desperate attempt to increase the declining Bitcoin adoption in the county, El Salvador claims they are building a “Bitcoin City.”
The architectural model of the city shows that it will be placed near the Conchagua Volcano, taking up most of the hills. The city will also have a hexagonal center, an airport, and various key landmarks.
The country says they started planning for the city as soon as it accepted Bitcoin as a legal tender in November 2021. El Salvador’s president posted the city’s model as an update in May 2022. For now, it is unknown when the construction will begin.
The geothermal energy the Conchagua Volcano provides will also apparently be utilized in sustainable Bitcoin mining.