El Salvador continues to deepen its involvement in the digital currency market, particularly Bitcoin (BTC), in a series of strategic moves that emphasize its commitment to cryptocurrencies. President Nayib Boucle recently announced that El Salvador plans to buy one Bitcoin every day, aiming to continue this practice until it can no longer be purchased with fiat currency. As a result of this initiative, the country's Bitcoin holdings have increased to a total of 5,690 BTC (equivalent to approximately $400 million).
This feature is part of CoinDesk's “Future of Bitcoin” package, published in time for Bitcoin's fourth “halving” in April 2024. Tatiana Koffman, head of investment firm Moonwalker Capital, is the author of a popular financial newsletter. MythOfMoney.com.
Alongside its commitment to cryptocurrencies, El Salvador has made a bold statement in the global investment landscape by abolishing income taxes on international investments and remittances. This tax cut from 30% to 0% is aimed at attracting foreign investors and boosting economic growth.
This week further highlighted the country's Bitcoin efforts, with over 5,000 BTC transferred to cold wallets. President Bukele revealed that a significant portion of these assets, worth $400 million in Bitcoin, were transferred to offline devices stored in physical vaults within the country. This move to secure digital assets with a “Bitcoin piggy bank” marks an important step in El Salvador's financial strategy, providing a higher level of security and demonstrating strong confidence in the future of cryptocurrencies.
The decision to transfer money to cold wallets came after El Salvador's Bitcoin vault unexpectedly swelled, nearly doubling its previously known assets under custody. The country acquired bitcoin through a variety of means, including everyday purchases, passport sales, currency conversion for businesses, mining, and government services. This approach led to a dramatic increase in El Salvador's Bitcoin holdings, which before this disclosure he was thought to be less than 3,000 BTC.
El Salvador's pioneering stance towards Bitcoin began in September 2021, when it became the first country to adopt Bitcoin as a legal tender. Since then, Bitcoin's value has fluctuated significantly, recently reaching an all-time high of $73,800. The country's continued daily Bitcoin purchases and the creation of tax-free crypto havens that harness geothermal energy from volcanoes represent an innovative approach to leveraging cryptocurrencies for economic development. is showing.
President Bukele's vision goes beyond simply accumulating Bitcoin. He envisions turning El Salvador into a wealthy country through strategic investments and initiatives related to digital currencies. Despite criticism and warnings from international organizations such as the International Monetary Fund (IMF), El Salvador's commitment to its Bitcoin strategy remains firm, and there are no signs that the country will retreat from cryptocurrencies.
El Salvador's bold foray into the world of Bitcoin and its efforts to create a more conducive environment for investing in cryptocurrencies reflects a major shift in the way the country perceives and interacts with digital currencies. As the country continues its Bitcoin acquisition program and strengthens its cryptocurrency infrastructure, it could set a precedent for other countries to follow and reshape the global financial landscape in the process.
