President Nayib Bukele said last week that a portion of the funds would be used to rehabilitate 15,000 square metres of El Zonte, known as Bitcoin Beach, due to the widespread use of the crypto. The planned developments include a beach club, a shopping mall, a parking lot, and a treatment facility. The remaining half was allocated to the Surf City project in adjacent La Libertad.
Blockchain Beach
Bitcoin Beach, El Salvador. Image: Pinterest
In the coastal hamlet of El Zonte, the Bitcoin Beach project was launched three years ago with an anonymous donation of digital money. Since then, merchants and visitors in the region have increasingly utilised Bitcoin for transactions, and workers in the city are paid in digital currency.
The success of Bitcoin Beach drew immediate attention, which led to a national discussion regarding cryptocurrency. This prompted Bukele to introduce legislation legalising Bitcoin as a legal tender in El Salvador, which was subsequently enacted.
Bitcoin as legal currency
El Salvador was the world’s first nation to adopt Bitcoin as a legal tender, which took effect on September 7, 2021. Despite warnings from important international groups, Bukele has regularly increased his Bitcoin holdings as the cryptocurrency’s value declined over the past year.
Photo public at El Zonte, Salvador. Image: CBS News
In addition to providing access to financial services for a mainly unbanked populace, Minister of Finance Alejandro Zelaya stated last month that using Bitcoin as legal tender has drawn international investment and increased tourism. The country’s Minister of Tourism announced earlier this year that tourism had surged 30% since September. Bukele credited the tourism industry’s revival in El Salvador to “Bitcoin and the waves.”
Despite these assertions, not everyone has been pleased with the new policy. Less than 20% of Salvadorans favoured the plans when they were originally disclosed in June of last year, according to a study done at the time. While many assumed they would have difficulty understanding the technology, others claimed it would just facilitate government corruption.
The corporate community has also exhibited a lack of enthusiasm. The adoption of Bitcoin by El Salvador’s enterprises has been exceptionally slow. Earlier this year, a poll revealed that only 14% of respondents had used Bitcoin since its debut as legal tender in September.