Bitcoin Beach in El Salvador will receive infrastructural developments as part of a $203 million government investment in the country’s beach tourism.
Some of the funds will be used to revitalize 15,000 square meters of El Zonte, which has come to be known as Bitcoin Beach due to the pervasive use of the cryptocurrency there, President Nayib Bukele said in an announcement last week. The planned developments include a beach club, shopping center, parking lot, as well as a treatment plant. The other portion of the investment went to the Surf City project in nearby La Libertad.
The Bitcoin Beach project was founded three years ago with an anonymous endowment of digital currency at the beach town of El Zonte. Since then, entrepreneurs and tourists in the area have increasingly used Bitcoin to conduct transactions, while workers in the town receive their salaries in digital currency.
Bitcoin Beach’s success quickly gained attention, which subsequently led to a national conversation about cryptocurrencies. This then led to Bukele introducing legislation that would legalize Bitcoin as legal tender in El Salvador, which passed shortly thereafter.
Bitcoin as legal tender
The introduction of Bitcoin as legal tender took place on September 7, 2021, making El Salvador the first country in the world to set such a precedent. Despite warnings from prominent international organizations Bukele has repeatedly doubled down, scooping up even more Bitcoin as its price has dwindled over the past year.
In addition to empowering a largely unbanked population with access to financial services, Minister of Finance Alejandro Zelaya said last month that the implementation of Bitcoin as legal tender had also attracted foreign investment and boosted tourism. Earlier this year, the country’s Minister of Tourism revealed that tourism had increased 30% since September. Meanwhile, Bukele recently attributed the recovery of El Salvador’s tourism industry to “Bitcoin and the surf.”
Despite these claims, not everyone has been satisfied with the policy change. When the plans were first announced in June last year, less than 20% of Salvadorans were favorable, according to a survey conducted at the time. While many felt they would struggle to understand the technology well enough, others believed it would only further enable government corruption.
The business community has also been less than enthusiastic. The adoption of Bitcoin use by businesses throughout El Salvador has been notably sluggish. According to a survey conducted earlier this year, only 14% of the respondents had made transactions in Bitcoin since its introduction as legal tender in September.
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