Bitcoin in El Salvador

Bitcoin is having quite the week in El Salvador, as the small country in Central America announced that they have become the first country to adopt Bitcoin as legal tender. Following this big announcement, President Nayib Bukele posted on his Twitter account that he has instructed the national power company, LaGeo SV, to begin developing a plan to provide renewable energy for Bitcoin mining powered by volcanos. While this sounds like something dreamed up in a science fiction movie, engineers in El Salvador dug a well yesterday that will provide 95 MW of clean energy (geothermal) powered by a volcano. See video here: https://twitter.com/nayibbukele/status/1402714926800674827?s=20

One of the major reasons President Bukele wanted to do this was to help citizens of El Salvador who live abroad send remittances back home without outrages fees, which often are more than 10%. El Salvador relies heavily on money sent back to the country from workers living abroad. World Bank data showed remittances to the country made up nearly $6 billion, or around 20% of GDP in 2019 (one of the highest ratios in the world). The Telcoin project is trying to solve this dilemma too. El Salvador does not have its own currency, and the US dollar will continue to be legal tender there too.

El Salvador will also offer citizenship to people who can show proof that they have invested in at least 3 Bitcoins (currently worth about $112,000). El Salvador will also allow taxes to be paid in Bitcoin, and businesses must begin accepting Bitcoin in 90 days, since it will be legal tender. It will be very interesting to see how the next 3 months go in El Salvador, and if other countries decide to follow their lead.