Falling Bitcoin Price Doesn't Affect El Salvador
Attending Bitconf 2022 and meeting with Dape Capital CEO Daniele Abdo Philippi and Ana Élle, CEO of Agency ROE were among the lawmaker's actions in Brazil.
Gonzalez reveals how Bitcoin has changed people's lives in El Salvador and how the federal government, led by President Nayib Bukele, has been using the monies invested in BTC to strengthen the economy.
When asked about El Salvador's Bitcoin investment and how it would affect people's lives if the value of the currency falls, Gonzalez said that every investment has a cost and a profit.
"What Nayib Bukele did was buy Bitcoins and make a profit at a certain strategic moment,” she said. “In cryptocurrencies, there are times when you can make a profit and there are times when you have to invest more. Now cryptocurrency is down, this happens, it's normal, but at this point instead of being sad, instead of thinking that you lost all your investment, it's time to buy more Bitcoins because now the price is cheap, that's the strategy.”
El Salvador, according to Gonzalez, is already benefiting from Bitcoin investments, citing two projects — a veterinary hospital and a public school — that were made feasible by the cryptocurrency. She went on to say:
"Bukele built a veterinary hospital to benefit the population where services, any service for your pet, costs US$0.25. Even an operation costs this amount and that is accessible to the entire population. Bitcoin has been converted into a benefit for the people. Now with the reserve, we have in Bitcoin, we must build 20 more schools. Before Bitcoin, to do this we had to approve projects, include them in the nation's general budget and use people's money for construction. Now, these works are done thanks to all the profits made with Bitcoin.”
Gonzalez indicated that Bukele’s strategy has already proven to be successful in terms of socio-economic impact.
"This is the main reason why the president also buys Bitcoins,” she said. “He does this to be able to generate profits for social projects for the people [...] This is not just words, it is something tangible for the population because they can see part of the public services being realized thanks to Bitcoin profits.”
El Salvador is also striving to enhance the impacts of the Bitcoin Law and will create an ecosystem based on cryptocurrencies, with the elimination of taxes for sectors related to the crypto economy, according to the deputy.
She also stated that additional laws will be rewritten to fit the changing demands of the digital economy and to lessen the amount of bureaucracy in government procedures.
She explained:
“We want it to be possible to open a business in 5 minutes here in El Salvador [...] We already have a national digital wallet system for cryptocurrencies and we intend to make a law so that investors from all over the world can have immediate citizenship in El Salvador if they invest in the world of Bitcoin in our country.”
Bitcoin changes people's lives
Gonzalez also told that the legalization of Bitcoin as a form of payment drew in investors and businesses from all over the world and enhanced merchants' and communities' independence from bank monopolies.
"It opened up an opportunity for independent merchants to have a new payment gateway, because the payment channels could be cash or could be credit or debit cards,” she said. “But if you go to a bank and want to apply for the [point of sales] to accept credit payments or debit, you pay a membership fee, you pay a commission that can be up to 9% for each purchase.”
Financial remittances from Salvadorans living in other countries, such as the United States, are another direct advantage mentioned by the deputy. According to Gonzalez, there are approximately 3 million Salvadorans living outside of El Salvador's boundaries, primarily in the United States.
Remittances from the United States can now be made without costs, thanks to Bitcoin, she noted. Gonzalez also stated that El Salvador's Bitcoin Law cost Western Union $400 million in remittance revenue last year.
Bitcoin Beach and Surf City
Gonzalez shared information about her country's Bitcoin Beach and Surf City programmes, both of which are being implemented in the El Zonte region. They use Bitcoin as a means of social revolution that encourages crypto payments and economic development via digital assets.
She explained that Bitcoin Beach existed prior to the passage of the Bitcoin law. "You may buy a Coke or a "Pupusa," a traditional El Salvadoran dish, on the street or travel to a fancy restaurant and pay with Bitcoins," says Bitcoin Beach.
The deputy also stated that in El Zonte, a project named Surf City is now ongoing, with the goal of training the local people to take advantage of surfing tourists, as the beach offers some of the best waves for the sport.
"These communities have now benefited from job opportunities in businesses or work in hotels and restaurants that now have more potential than before, now more tourists come to El Salvador because they [...] can pay for everything they want with Bitcoins,” she said. “I know companies that came from Singapore a few months ago and now have about 50 Salvadorans working on their operations. This shows how Bitcoin has been changing people's lives in El Salvador.”
Furthermore, the deputy underlined how Bitcoin has benefited the unbanked, who can now access financial services without the bureaucracy of traditional systems thanks to cryptocurrency:
"Traditional banks excluded 70% of the country's population from their services for different reasons. In addition, of the 30% of the population that has access to financial services, only 23% were in banks, while 7% did so through cooperatives with very high rates. Now Bitcoin and cryptocurrencies are favoring this excluded population that now has power and opportunity.”