On June 9, 2021, the Bitcoin Law was approved within the Legislative Assembly of El Salvador, the regulation that granted the largest digital asset on the market the status of legal tender in that nation. It was a milestone in world history. As duly reported by BitcoinDynamic, the legislative body of the Central American country approved at that time with 62 votes in favor the law, which was presented to that institution of the Salvadoran State. by President Nayib Bukele.
Although the law came into force three months after its approval in the Legislative Assembly, the regulations showed that bitcoin (BTC) would be used “in any transaction and in any title that natural or legal persons, public or private, require.” carry out». This meant that individuals, companies, public administration bodies and other institutions of the Salvadoran State, They received the power to use BTC as currency. This, with the addition that all economic agents in the country were forced to accept bitcoin as a form of payment.
The Bitcoin Law was approved in the Salvadoran Parliament three years ago. Source: Nayib Bukele.
What has happened since then?
After the approval of the Bitcoin Law in El Salvador and its entry into force, the Central American country has been the epicenter of different initiatives oriented to the ecosystem of digital assets. This has made that country emerge as a nerve center for nation-state adoption of BTC and its underlying technology.
Since El Salvador became the first country in the world to give legal tender to BTC, the country has dedicated itself to the establishment of an entire regulatory infrastructure for the digital asset ecosystem, which has been classified as “friendly” by industry leaders, like the American bitcoiner Jack Mallers. This is how, shortly after the Bitcoin Law was approved and came into force, the Bukele government sent various legislative proposals to Parliament, most of them, aimed at promoting the development of the emerging ecosystem from that country.
For example, the Law on the Issuance of Digital Assets was approved and a regulatory body was established, called the National Commission for Digital Assets (CNAD). Such an organism is the person in charge of overseeing the performance of companies in the sector of virtual assets in El Salvador. Likewise, a law was approved that exempts technology companies that operate and work from El Salvador from taxes. All with the intention of boost foreign investment in the smallest country in Latin America.
Foreign investment growth
Indeed, based on the Bitcoin Law and all the jurisprudence approved for the emerging ecosystem, El Salvador began to see an increase in foreign investments. Companies in the BTC sector felt the Salvadoran influence and did not hesitate to inject capital. This was demonstrated by the Bitcoin Association of El Salvador, which reported the arrival of hundreds of requests from foreign companies for legal, financial and immigration advice. This is how large companies in the cryptocurrency sector and the technological world, They prepared to open offices in El Salvador. Key examples are Binance, the largest exchange in the cryptocurrency market, as well as Google, the American technology giant, which set up offices on Salvadoran soil. The Bitcoin Law made El Salvador became a magnet for large companies in the Fintech sector that, under other conditions, they would not have thought about settling in that country, as the former director of International Technological Affairs for the Secretariat of the Presidency, analyst Mónica Taher, said at the time.
More than 80 companies decided to establish their headquarters in El Salvador, including the oldest football club in Bulgaria. Source: X/StacyHerbert. Another achievement achieved from the approval of the Bitcoin Law of El Salvador and its subsequent entry into force, is the sustained increase in tourism. The latter, an important sector that contributes to the economic development of that nation. Shortly after the regulation was approved, more than 1 million visitors arrived in El Salvador. Many of them, inspired and called by the bitcoiner reality of the Central American nation. This was a 40% increase in the number of visits, just after the arrival of the Bitcoin Law, as reported by BitcoinDynamic. In this way, both Bitcoin, surfing and security, They became great incentives for the increase in tourism to that country of volcanoes. As Tourism Minister Morena Valdez said at that time, the adoption of bitcoin was an important step to attract foreign visitors, considering that this sector grew to the point that there are tourists who decide to stay in that country. According to Valdez, bitcoin has helped El Salvador have more visits, being that most people “are attracted because El Salvador is the first country to give legal tender to BTC.” The approval of the Bitcoin law in El Salvador also had a notable influence on the educational sector of that nation, since the Bukele government, as well as from private initiativesteaching programs have been carried out about the world's most important decentralized digital asset. An example of these programs is CUBO+, carried out by the Bukele government. This initiative teaches about Bitcoin and its technical part to students in that country, allowing many of these children and adolescents to learn, for example, to run a Bitcoin node.
The young graduates of the first generation of CUBO are now trainers in Salvadoran schools and high schools. Source: X/PupusaG. Another program is Mi Primer Bitcoin, which was born along with the legal adoption of BTC in El Salvador. Led by bitcoiner John Dennehy, this educational project has become embedded in the public schools of El Salvador, allowing the little ones to learn the most basics of money, even why bitcoin is simply better. As part of these educational initiatives, others also emerged such as Node Nation SV, focused on teaching Salvadoran children to code, configure, operate and manage liquidity of a node on the Bitcoin Lightning network.
A better international image
With the approval of the Bitcoin Law in El Salvador, that country also obtained benefits regarding its presence internationally. This is how, according to what President Bukele himself expressed, BTC gave “another face” to the Central American country, which was once rejected due to its high levels of insecurity. Bukele stated that by law, there are now people who want to “escape censorship and prohibitions.” As he sees it, these are people looking for “places open to bitcoin and cryptocurrencies.” And that is why “there are many people interested” in the Salvadoran system.
Beyond that, the Bitcoin Law preceded an entire security policy that led to the arrest of hundreds of thousands of gang members and criminals, who were taken off the Salvadoran streets, returning peace and tranquility to its inhabitants.
As Max Keizer, one of President Bukele's Bitcoin advisors, put it, the legal adoption of BTC “also took power away from gang members.” This, since bitcoin allowed criminals to lose monetary control, who took up to 30% of the income of Salvadoran inhabitants through extortion. Keizer stated that the legal adoption of BTC occurred before the war on crime, because it is an unconfiscatable asset that prevented criminals from continue to finance itself from the Salvadoran people.
A policy that follows
After three years and a presidential reelection, the Bitcoin Law remains and will remain as a fixed state policy for Bukele and his new government, due to the positive results it has obtained, according to analysts consulted by BitcoinDynamic. Both Monica Taher and Mike Peterson, leader of the Bitcoin Beach citadel, agree that the Bitcoin Law will continue to be a bishop in the new administration. They do not see that the Bukele government is going to set aside this initiative and they rather believe that it will be strengthened.
Thus, after 3 years with the new and innovative law, everything seems to point to El Salvador continuing to reap the fruits of its policy. Even if it means come into conflict with large institutionssuch as the International Monetary Fund (IMF).