Welcome to the second part of our series on El Salvador and Bitcoin. In the previous part, we talked about:
Now, in the remaining parts, we shall explore the following:
- The start of El Salvador’s Bitcoin revolution.
- Bukele’s Bitcoin plan.
- The long-term implication of this decision.
Before we get into El Salvador’s Bitcoin revolution, we must introduce the dynamic young leader at the heart of this movement.
Bukele has already implemented loads of reforms that significantly curtailed gang violence and reduced the murder rate. However, this decision to make Bitcoin legal tender could be the most revolutionary one yet. So, how did the whole “Bitcoin and El Salvador” thing come about? After all, El Salvador allegedly has the lowest amount internet penetration rate in Latin America.
Well… turns out that a certain beach in El Salvador has managed to stay ahead of the times.
Enter Bitcoin Beach
That is El Zonte, a small beach town in El Salvador. Do you know what makes it unique apart from being aesthetically beautiful? The residents in this small town have been using bitcoin regularly for nearly two years.
So, how did this begin?
Back in 2019, an anonymous American donor sent Bitcoin to non-profits in El Zonte, intending to find ways to build a sustainable cryptocurrency ecosystem in the community. After that, the non-profit workers and the donors launched “Bitcoin Beach” to help inject Bitcoin into the local economy. They helped set people up with digital wallets and enabled businesses to set up different systems to accept BTC payments.
Galoy Money, a tech company based in California, built a Venmo-like app to enable residents to exchange Bitcoin. The app allows them to see which businesses accept Bitcoin and look one another up by username. This has been revolutionary for the people in the community since, while only 10% of the locals hold bank accounts, at least half of the popular have smartphones making them the ideal starting point.
This is how the Bitcoin Beach website describes the positives of the community-wide adoption thus far:
“So far Bitcoin Beach has positively impacted the lives of more than 600 users, giving them the tools to set up wallets using Bitcoin (facilitated by the Lightning Network) for everything from buying a $1 bag of tortillas to paying for a $3 haircut.”
Bitcoin Beach’s Three Phase Adoption Plan
On their website, Bitcoin Beach has laid out three phases to their adoption program.
- Get Bitcoin into the local community.
- Make sure local businesses are accepting it as payment.
- Educational stipends for students in schools and universities.
- Teach more local companies how to get BTC and educate them on their merits and demerits.
- Ramping up the user base to 600 families with active wallets and weekly usage.
- Show locals the benefits of receiving international remittances in BTC instead of expensive and inconvenient services like Western Union.
- Educate the locals about Lightning Network.
- Increase Bitcoin tourism and tech development for the growth of well-paying jobs.
- Make coastal El Salvador a hub for Bitcoin-related tech companies.
- The long-term goal is to enable young Salvadorans to seek their future in the country instead of migrating to the US.
Expanding This To The Whole Country
Of course, it is one thing to disrupt the payment system on a small island and an entirely different proposition to do the same for the whole country. So, in the next part, we will see how the Bukele government plans to inject BTC into the country’s economy. We will also look at the potential impact that a BTC-fuelled economy could have on the country’s future.
Read Part 3 of this series here: Bukele’s Bitcoin Plan