Quoted from taylor34:I'm not even sure why they're still buying since it's been a failure in their country. Usage is declining, not increasing, less than 2% transactions now.
Interesting argument of if it is a failure or not. Hasn’t even been 2 years since they adopted it as legal tender. So jury is out atm.
Usage is down since the pilot program launched were every Salvadoran was given a voucher of free Bitcoin. Most cashed out and moved on with their life spiking usage.
Here are the positive
Increased remittances: El Salvador is heavily reliant on remittances, with about 20% of its GDP coming from money sent by Salvadorans living abroad. Bitcoin's adoption may help reduce the fees and processing times associated with traditional remittances.
Attracting foreign investment: El Salvador's decision to embrace Bitcoin attract cryptocurrency investors who are interested in exploring business opportunities in the country. El Salvador will grant ppl citizenship by investing 100k usd in their economy, buy a house or business etc. Currently they are heavily incentivizing business and people to relocate there quite the opposite as US imo.
Travel and infrastructure:
Travel since the adoption of btc as legal tender travel has dramatically increased. Boosting local small businesses and infrastructure. Before they adopted btc it was very low on countries I would want visit (and I spent a month in Nicaragua) now it’s pretty high up there.
While they may be down in usd terms like the Costco hotdog, the draw maybe worth the costs. And it is quite possible the value could exceed their costs in. It also allows El Salvador to not be reliant on the usd which is probably the biggest selling point.
Negatives:
The country is run by a dictatorship.
A good read
https://www.thestreet.com/investing/el-salvador-has-unexpected-benefit-from-bitcoin-adoption