In June 2021, President Nayib Bukele shocked everyone and announced that Bitcoin will become a legal tender in El Salvador in September. Today, on the 7th of September, El Salvador became the first country to recognize Bitcoin as the official currency of the country. Will El Salvador’s economy benefit from the decentralized system of Bitcoin? How will the Bitcoin revolution affect cryptocurrency mass adoption?
This situation is the first of its kind, and shortly, we will learn how it works in practice. On paper, everything is well-planned. What is more — Bitcoin is not entirely new for the people of El Salvador. 70% of El Salvador’s population do not have a bank account. Therefore, digital currency already plays an important role in El Salvadorian society.
Why do we at ccFOUND.com think that adopting Bitcoin as a legal tender might succeed?
- Preventing inflation — El Salvador is highly dependent on the USA and on the US Dollar. That means that post-COVID-19 reality could be harsh for the country that is set to be directly hit by the US Dollar inflation. In the interview with Peter McCormack, the president of El Salvador Nayib Bukele said that the adoption of a US Dollar as a currency was done for the benefit of the banks. He also said that adopting Bitcoin is done for the benefit of the people.
- Decentralization — We believe that decentralization is inevitable and recognizing Bitcoin as a legal tender directly promotes decentralization. In a country with a history of corruption, using decentralized and transparent currency might be just the solution that is needed.
- Entrepreneurial incentive — People who are ready to move to El Salvador and invest the amount of three Bitcoin there will be granted permanent residency. El Salvador has got many benefits, such as no property tax or no capital gains for Bitcoin. It is likely to encourage blockchain entrepreneurs to move to El Salvador. And there are people out there who are willing to do that. One of the examples is Bitcoin Beach — the organization that brought Bitcoin to El Salvador in 2019 to help the local economy and create a place where bitcoin will be widely accepted. And so far, they are succeeding.
Will El Salvador force people to use Bitcoin?
The Bitcoin Law in El Salvador makes it obligatory for people to accept bitcoin. Nevertheless, it provides an option of automatic and instant conversion from BTC to USD should anyone wish to do that. That gives the people of El Salvador the freedom to choose the currency they feel more comfortable with. Isn’t that a great example for other countries?
Will that work?
We’re living in a very dynamic world. People are becoming more and more aware of the flaws of the current financial system. We’re also experiencing the inevitable switch from the era of knowledge to the era of wisdom. People who are aware of it are likely to succeed. Trying out new solutions and becoming independent from the current financial systems, big companies, and powerful countries is a natural step.
For example, ccFOUND is one of the crypto projects taking that step — creating a social media free of fake news, bots, or unnecessary censorship, promoting substantive discussion and freedom. El Salvador takes that step by adopting Bitcoin as its legal tender and trusting Bitcoin’s technology, transparency, and freedom.
El Salvador is a pioneer in implementing blockchain not only in IT but in people’s everyday lives. ccFOUND CEO Piotr Michalak said ‘I believe it will take from 5 to 15 years to change people’s mindset globally regarding cryptocurrencies and blockchain. People will eventually get used to the fact that there is a possibility of using cryptocurrencies in the same manner as they currently use fiat currencies. In the meantime, other countries will follow the lead of El Salvador, and what today is called a revolution, will become a reality in most countries”.
That’s where ccFOUND comes — a place that will help in mass adoption by making knowledge about cryptocurrencies (and many more financial topics) more accessible. A one of its kind decentralized hub where people can share, find and monetize knowledge.
In the meantime, we’d like to invite all interested in the future of the Internet to visit our ccFOUND.com website — and learn more about the social media that will revolutionize the Internet just as the President of El Salvador revolutionized the financial system in his country. Be sure to either register on our crowdfunding platform or join our newsletter list.