Bukele takes office as president-elect: what to expect from his bitcoin policy?

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By TP

Key facts: Bitcoin Beach's Mike Peterson says Bitcoin policy will be run by the private sector. Analyst Mónica Taher maintains that the construction of Bitcoin City is a pending task. This Saturday, June 1, Nayib Bukele will be sworn in as president of El Salvador, who after an overwhelming electoral victory, will repeat the position for another five-year term. That will be a period in which bitcoin (BTC), its key play of 2021, will remain a priority state policy. In a ceremony that will begin at 7:00 in the morning, local time, and in the Historic Center of San SalvadorBukele will be sworn in as the ninth constitutional president of El Salvador.

In this way, he once again assumes the reins of a country that in 2021 took a historic step, that of giving legal tender to bitcoin (BTC), the most important digital asset on the market. In just over two years, Bukele carried out a policy that was responsible for giving El Salvador the “friendly” rating for BTC monetary innovation. This was translated in an entire legal framework for the emerging market, as well as a series of projects and initiatives aimed at massifying the adoption of the asset among Salvadorans. Now Bukele is preparing to govern the Salvadoran nation for five more years. What will happen to bitcoin in that time? For analysts and specialists consulted by BitcoinDynamic, in that period, The ruler will keep his Bitcoin policy fixed.

It will be harvest time

This is so since his policy with bitcoin has given results to his government to put El Salvador in the world economic arena. In addition, BTC has promoted the arrival of foreign investment, which translates into growth for that nation, something that will surely continue to happen. One of these consulted specialists is Mike Peterson, economist and director of Bitcoin Beach El Salvador, the first bitcoin citadel in the world. He maintains that for this new mandate, Bukele will direct his efforts to stay on the bitcoiner path.

In his opinion, the Salvadoran ruler will look “like a genius” as time progresses and the price of BTC increases and other governments and financial institutions “capitulate.” “We are already seeing this. Bukele will take advantage of his advantage in this area,” he assured BitcoinDynamic. He thus recalled that Bukele, on behalf of the country, began investing in bitcoin in 2021 and that currently these movements are in profits, with amounts exceeding USD 390 million, approximately. Peterson agreed with Mónica Taher, a political and economic analyst from El Salvador, who became part of Bukele's first administration. In her opinion, Bitcoin is a “flagship project that catapulted the Bukele government around the world.” “From a marketing point of view, it has worked. It will remain latent. Although the country is unable to pay its debt with the International Monetary Fund and said entity has suggested reversing the law,” Taher said, recalling the diatribe between El Salvador and that international entity.

Bitcoin Beach was the project that inspired the adoption of BTC as legal tender in El Salvador. Source: L'Unión.

Bitcoin companies will continue to arrive in El Salvador

According to what was suggested by Mike Peterson, from Bitcoin Beach, in Bukele's second term there will be a “large influx of Bitcoin financial and technology companies” arriving in El Salvador. Peterson recalled that a “first wave” is already underway of companies in the bitcoin sector based in El Salvador. And he predicts that by the end of Bukele's second term, in 2029, “bitcoin will be accepted in the vast majority of Salvadoran companies.” Likewise, the bitcoiner predicted that in Bukele's second term, private companies They will be the ones that drive Bitcoin policy in the country and that the government will “simply provide a friendly environment” so that these companies can develop and grow. This last idea is contrary to what Taher thinks, who assured that, although the door was opened for foreign companies, he does not believe these will drive the nation's Bitcoin policy.

“The government will continue to set the rules and companies will simply form the ecosystem, but not direct it,” says Taher, who also recalls that BTC companies They go to El Salvador to benefit from the tax exemption.

This, remembering that El Salvador approved a law in 2023 that exempts technology companies and the bitcoin sector that operate in its territory from taxes. An incentive for foreign investment focused on the largest digital asset on the market.

And Bitcoin City when?

According to those consulted, part of what is expected in Bukele's second term is the completion of the bitcoiner projects announced in 2021, such as the construction of Bitcoin schools or the creation of Bitcoin City. Analyst Mónica Taher says that the ecosystem hopes that the construction of that bitcoiner city will begin, which until now has not even seen the first tractor moving earth. This, despite the fact that it is already reflected in tourist packages from Salvadoran companies.

Bukele during the announcement of Bitcoin City, in September 2021. Source: Infobae. Taher also says that greater financial education would be expected “for ordinary people.”, so that they “can also use bitcoin as currency.” Thus, it refers to one of the promises not fulfilled by Bukele in his first government, when he said that would create Bitcoin schools with the profits from the investment in that asset.

Peterson, however, is a little more cautious and assures that those Bukele announcements, made in the heat of the legal adoption of bitcoin in 2021, “were ambitious ideas.” He believes some of these “can move forward.” But others “will be transformed into new and better projects.” So, ultimately, bitcoin will bring fruit to El Salvador over the next 5 years and that is something that American investor Cathie Wood has no doubts about, who said that “taking advantage of bitcoin and AI to drive their economic and educational reforms, the President could multiply El Salvador's GDP by 10 during his next five-year term.” Wood recently met with Bukele who revealed to him the plans he has with bitcoin for his second term. And from the result of the meeting in which the American economist Arthur Laffer was also present, there are solid indications that the Salvadoran economy will improve.