Tag: El Salvador

Breaking: Bitcoin Enters Banking System: El Salvador’s Cuscatlan and Agricola Accept it for Loans

by Blockchain News

El Salvador may be the most enthusiastic country to adopt Bitcoin. In addition to declaring it legal tender and investing in Bitcoin mining, the country now allows Bitcoin to serve as collateral for mortgages.

Two major banks in El Salvador, Cuscatlan and Agricola, have announced that they will now accept Bitcoin for loan payments. Customers can use Bitcoin to settle credit card debts or loans directly, eliminating the need for fiat conversion. This groundbreaking move was revealed through a tweet by Volcano Energy, a key player in El Salvador’s emerging crypto landscape.

The announcement aligns with El Salvador’s broader strategy to integrate cryptocurrency into its financial infrastructure. This is not just another step for Bitcoin adoption in El Salvador, but a significant move that could set precedents for the banking industry globally.

Legal Tender and Bitcoin Mining

In a landmark decision that garnered international attention, as reported by Blockchain.News, El Salvador’s President Nayib Bukele announced in June 2021 that the nation would be the first to make Bitcoin legal tender. Prior to this, Bitcoin had largely been regarded as a speculative asset, notorious for its price volatility.

on June, 2023, Volcano Energy, known for its renewable energy ventures, appears to be broadening its ecosystem to financial services that facilitate cryptocurrency transactions. The company has previously announced a $1 billion investment in a Bitcoin mining startup. This was part of a renewable energy initiative backed by Tether, aimed at making El Salvador a global hub for sustainable Bitcoin mining.

While the announcement focuses on financial transactions, the sustainability angle offered by Volcano Energy shouldn’t be ignored. El Salvador is already utilizing renewable resources for Bitcoin mining, and the same sustainable approach could be adopted for transactional services. As the nation attempts to make its financial system more resilient and self-reliant, sustainability may serve as a cornerstone.

Regulatory and Financial Implications

El Salvador has been a forerunner in cryptocurrency adoption since it made Bitcoin legal tender in September 2021. However, this announcement from Cuscatlan and Agricola Banks, facilitated through Volcano Energy, could have far-reaching implications. It is yet to be seen how international bodies like the International Monetary Fund (IMF) and even US Federal Reserve will respond to El Salvador’s banks incorporating Bitcoin payments for loans and credit cards.

What’s Next?

As cryptocurrency becomes increasingly integrated into El Salvador’s financial and energy sectors, the acceptance of Bitcoin by Cuscatlan and Agricola Banks marks a significant stride. This could pave the way for broader financial inclusivity and innovations in banking transactions, powered by renewable energy and blockchain technology. While it is too early to predict the full impact of this development, it surely positions El Salvador as a testbed for a new form of banking that incorporates cryptocurrencies.

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El Salvador Eliminates Taxes on Technology Innovations

by Blockchain News

El Salvador made history in September 2021 by becoming the first country to establish Bitcoin as a legal tender. The move was aimed at countering hyperinflation and dependence on the US dollar, which has long been a significant concern for the country. Since then, El Salvador has been restrategizing its Bitcoin investments and utilizing capital gains to rebuild the nation.

As part of its ongoing efforts to expedite technological development and attract international investment, President Nayib Bukele recently eliminated all income, property, and capital gains taxes on technology innovations. The move was intended to encourage local entrepreneurs and foreign investors to set up shop in El Salvador, positioning the country as a technological and economic power. The bill was officially sent to Congress on April 1, as promised.

To support this initiative, Bukele also established the National Bitcoin Office (ONBTC), which will work with Bitcoin entrepreneurs and companies to conduct joint initiatives. The Bitcoin Association of El Salvador has welcomed the move, stating that it aligns with its vision to make the country a hub for technological innovation and entrepreneurship.

In addition to promoting technological development, Bukele is also taking measures to reinvent El Salvador in other ways. One such measure is promoting tourism to boost the country’s economy. Bukele has been working with private companies to build beach resorts and theme parks to attract international visitors.

Another measure is countering terrorism. El Salvador has a long history of gang violence and crime, which has impacted the country’s economy and security. Bukele has been working to tackle this issue, and his administration has implemented several measures to address it, including deploying the military to high-crime areas.

Finally, Bukele is also focused on building regional business hubs to attract foreign investment. As part of this effort, El Salvador recently passed legislation to provide the legal framework for Bitcoin-backed bonds called Volcano Bonds. These bonds are named after the location of Bitcoin City, which is set to become a renewable crypto-mining hub powered by hydrothermal energy from the nearby Conchagua volcano.

In conclusion, El Salvador’s decision to eliminate taxes on technology innovations is a significant step towards its goal of becoming a technological and economic power. Along with the establishment of the National Bitcoin Office and the promotion of tourism and regional business hubs, El Salvador is positioning itself as an attractive destination for entrepreneurs and investors. These efforts are expected to have a positive impact on the country’s economy and overall development.

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El Salvador is Opening a Bitcoin Embassy in the United States

by Blockchain News

The nation of El Salvador is creating a “Bitcoin Embassy” in the United States, making it the first government in the world to do so. Bitcoin (BTC) is the most popular cryptocurrency in the world.

In 2021, El Salvador became the first nation in the world to recognize bitcoin as a form of legal cash. Now, the country is extending its Bitcoin strategy via a new cooperation with the government of Texas. The intergovernmental partnership intends to establish a Bitcoin Embassy, also known as El Salvador’s representative office, in Texas in order to collaborate on the development of new initiatives that seek to increase Bitcoin use.

Milena Mayorga, the Salvadoran Ambassador to the United States, broke the news in a message on Twitter on Feb. 14.

“During my meeting with the assistant secretary of the government of Texas, Joe Esparza, we discussed the opening of the second Bitcoin Embassy as well as the expansion of commercial and economic exchange projects,” Mayorga said. “We also discussed the expansion of commercial and economic exchange projects.”

The most recent Bitcoin project was launched only a few months after El Salvador established the world’s first Bitcoin Embassy in the city of Lugano, which is located in the southern region of Switzerland, in October 2022. As a part of these efforts, the two pro-crypto jurisdictions have begun working toward the establishment of a physical governmental presence in order to foster collaboration in education and research institutes relevant to Bitcoin.

Samson Mow, who formerly served as the chief strategy officer at Blockstream, believes that the phenomenon of Bitcoin embassies is the next phase in the process of countries and cities embracing Bitcoin. According to what he mentioned, such projects need collaboration across nations in order to launch new initiatives such as forming alliances amongst locations that have accepted Bitcoin.

The announcement comes at a time when it is being claimed that state legislators in Texas are exploring a new measure that would require “a master plan for the growth of the blockchain business.” The legislative initiative’s overarching goal is to make Texas the cryptocurrency capital of the United States by, among other things, making purchases using Bitcoin exempt from sales tax.

As was previously reported, Texas has emerged as one of the crypto-friendly states in the United States. This is due to the state’s passage of crypto-friendly legislation, which seek to better adapt commercial laws to the innovation brought about by blockchain and to digital asset regulations. Major mining businesses like Riot Blockchain, Core Scientific, and Genesis Digital Assets all have operations in the state of Texas. As a result, Texas is home to some of the most powerful Bitcoin miners in all of North America.

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El Salvador’s Crypto Law Allows Bitcoin-Backed Bonds

by Blockchain News

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El Salvador has recently passed historic legislation that will provide the legal basis for a Bitcoin-backed bond to be issued in the country. This bond, also known as the “Volcano Bond,” will be put toward the reduction of the country’s overall debt as well as the funding of the construction of the “Bitcoin City” that is envisioned for El Salvador.

On January 11, 62 individuals cast their ballots in support of the measure, while 16 individuals cast their ballots against it. When President Bukele gives the bill his stamp of approval, it will be well on its way to being enacted as a statute.

As stated by the cryptocurrency exchange Bitfinex, which is the technology provider for the bonds, the Volcano Bond, which is also known as Volcano Tokens, would make it possible for El Salvador to raise capital to pay down its sovereign debt, fund construction of the Bitcoin City, and create Bitcoin mining infrastructure. All of these goals could be accomplished with the proceeds from the sale of the bonds.

The bonds were given the volcanic description because of the location of the country’s Bitcoin City, which is planned to become a self-sustaining crypto-mining center that will be fueled by hydrothermal energy obtained from the nearby Conchagua volcano. As a direct result of this, the bonds were presented in the form of an active volcano.

According to Bitfinex, the city would function as a special economic zone, analogous to those that can be found in China. Such a zone would offer residents of the city tax breaks, rules that are friendly to cryptocurrencies, and other incentives to encourage them to engage in Bitcoin-related business.

It is anticipated that the issuance of these bonds will bring in one billion dollars for the country, of which half a billion dollars will be allocated to the building of the special economic zone. The first hypothesis suggested that the maturity date of the tokenized bonds would be in ten years, that they would be denominated in U.S. dollars, and that they would bear an annual interest rate of 6.5%.

In addition, the measure creates a legal framework for all digital assets that are not Bitcoin, in addition to those that are issued on Bitcoin, and it also establishes a new regulatory body that will be responsible for administering securities legislation and providing protection from malicious actors.

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El Salvador Bukele’s administration proposed ‘Bitcoin bonds’

by Blockchain News

The idea for El Salvador’s ambitious “Bitcoin bonds” campaign, which was conceived at a period of falling prices in the cryptocurrency market, has already moved forward a significant amount toward actualization.

A legislation that underlines the government’s intention to create one billion dollars and spend it on the establishment of a “Bitcoin city.” was suggested by the Minister of the Economy, Maria Luisa Hayem Brevé.

It was on November 17 that a measure pertaining to digital securities comprising 33 pages was presented to the El Salvador House of Representatives with the request that they draft a legal framework that would make it possible for the country to use digital assets in its public offerings.

Volcano bonds, sometimes known as Bitcoin bonds, were first introduced by the financial system by the government of Nayib Bukele, who served as president from 2021 to 2022.

The initial version of the proposal called for the sale of bonds with a total face value of close to one billion dollars, with the proceeds from the sale going toward the development of a “Bitcoin City” at the base of the Colchagua volcano. This version of the proposal was scrapped after it was determined that the sale of the bonds would not be profitable.

It is believed that the hydrothermal energy generated by the volcano will make the city an excellent site for a cryptocurrency mining factory, and that this will happen since the city will be situated in close proximity to the volcano.

Bitcoin would get a direct investment equal to fifty percent of the entire amount produced if this proposal were to pass.

The undertaking has been continually hampered by postponements throughout the course of the preceding year and a half. After initially being scheduled to start at the beginning of March, the launching phase of the project was first postponed until September, and then it was delayed once again for “security reasons.”

The possibility that the proposal will be approved by the legislature before the winter holidays has been raised by a few different sources.

When Bitcoin was finally recognized as a form of legal cash on September 7, 2021, El Salvador was given more than 2,301 BTC as their reward. This sum is about comparable to $103.9 million dollars.

During the period of time when the stock market was thriving, the gains from the investment were even utilized to contribute toward the building of healthcare facilities and educational institutions.

Despite this, 77.1% of people living in El Salvador are of the opinion that the government should stop “spending public money on Bitcoin.” especially considering the continued decline of the country’s economy.

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Switzerland City Lugano Signs Agreement With El Salvador To Enhance Bitcoin Adoption in The Regions

by Blockchain News

On Friday, the Swiss city of Lugano and the country of El Salvador signed an economic cooperation agreement aimed at boosting Bitcoin adoption in their own regions and neighboring states and nations.

The two crypto friendly jurisdictions signed a memorandum of understanding (MOU) on economic cooperation at Lugano city’s Plan B event on October 28.

While speaking at Lugano’s Plan B Forum on Friday, Lugano Mayor Michele Foletti said El Salvador’s Bitcoin adoption as legal tender is part of the city’s interest in the agreement. The Lugano Mayor said the partnership will enable the city and the pro-crypto country (Switzerland) to develop a physical government presence in bids to build cooperation with educational and research institutions.

 Milena Mayorga, El Salvador’s ambassador to the U.S., also appeared on the stage, saying that her country plans to open a “Bitcoin office” in Lugano staffed with a new Honorary Consul to promote Bitcoin adoption in the city, Italy, and Europe. She said: “With this agreement, El Salvador is now much closer to Europe.”

Meanwhile, former Blockstream chief strategy officer Samson Mow also spoke at the event and said the agreement is the “next step” in nation-states and cities adopting Bitcoin. He described the collaboration between El Salvador and Lugano as the way alliances were created between places that have adopted Bitcoin.

Other personalities who later joined the stage include Mexican politician Indira Kempis, Serbia’s Prince Filip Karađorđević, and Lugano’s Director of Economic Promotion Pietro Poretti while former Guatemala’s congressperson and potential presidential candidate Zury Rios also delivered her speech via video link.

In March this year, the city of Lugano and Tether, the issuer of USDT stablecoin, formed Lugano’s Plan ₿ as a joint initiative to make the city a European leader in the use of decentralized digital currencies.

Paolo Ardoino, Chief Technology Officer of stablecoin issuer Tether, also appeared on the panel of Plan B Forum on Friday where he said Bitcoin adoption in the city is “working well,” with 40 merchants are already using the cryptocurrency with their point-of-sale systems.

Lugano, the 9th biggest city in Switzerland, wants to become Europe’s Bitcoin city. While Tether is already there helping her, El Salvador, which became the first country to adopt bitcoin as legal tender, has joined hands.

In March, Tether’s Paolo Ardoino and Michele Foletti, the Mayor of the city of Lugano, unveiled the plan to transform Lugano into the European Bitcoin capital.

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Costa Rican Lawmaker Proposes to Regulate Crypto Market

by Blockchain News

Johana Obando, a congresswoman from the Central American country of Costa Rica, has introduced a bill to Congress requesting the government to regulate the crypto market and cut taxes on cryptocurrencies, making Costa Rica a cryptocurrency-friendly country.

The bill proposes that the Costa Rican government recognize cryptocurrencies and allow people to hold, trade freely, and spend cryptocurrencies.

Johana Obando mentioned on his official Twitter that Cryptoassets Market Law (MECA) will “protect individual virtual private property, self-custody, and decentralization of crypto assets” from the country’s central bank – but in “perfect harmony” with it “.

Johana Obando, along with members of Congress Luis Diego Vargas and Jorge Dengo, proposed that Costa Rican citizens should not be taxed on goods purchased using cryptocurrencies, and the government should not tax cryptocurrencies generated from mining, but that profits from trading cryptocurrencies would be subject to income tax.

Obando said the move would attract foreign investors and fintech companies and create jobs for Costa Rican citizens.

As cryptocurrencies continue to gain popularity worldwide, many countries have placed great emphasis on cryptocurrencies.

Costa Rica also ranks among the countries with the highest acceptance of cryptocurrencies.

In 2018, according to the country’s law, in Costa Rica, part of an employee’s salary can be paid in cryptocurrencies, and wages can be paid not only in fiat currency but also in commodities. Some legal experts believe that cryptocurrencies are suitable for this category.

In addition, Costa Rican law provides for the use of generally accepted assets as a means of payment.

The country’s work code allows workers to receive part of their wages in cryptocurrency. They can also negotiate with employers about how much cryptocurrency they want to receive.

Unlike El Salvador, which uses bitcoin as legal tender, the bill proposes introducing cryptocurrencies as private virtual currencies that can be used and circulated freely but not as national legal tender.

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Bitcoin Is Working Despite Broad Market Downturn, Says El Salvador FM

by Blockchain News

Despite El Salvador experiencing heavy losses in its Bitcoin bet, finance minister Alejandro Zelaya has defended the country’s strategy to adopt Bitcoin as legal tender. Zelaya made such revelations in an interview on Wednesday.

While it is almost a year into El Salvador’s bet on Bitcoin, critics have urged the nation to drop the experiment as the cryptocurrency industry suffers through a bear market.

Zelaya acknowledged the setbacks but said he sees a future where digital tokens play a bigger role.

In the past, El Salvador bought 2,381 Bitcoins with public funds. However, such Bitcoin investments are currently worth about 50% less than what authorities paid for them because of the ongoing market plunge.

According to a survey conducted by the U.S. National Bureau of Economic Research, most businesses and consumers in El Salvador still prefer using hard currency to send remittances and pay for goods and services.

In January, The International Monetary Fund (IMF) urged the country to remove Bitcoin as legal tender.

In the interview, Zelaya said: “I believe in the traditional, international monetary system just as I believe that new technologies are going to help human beings in the future. So, I think making that transition is vital, and it would be wrong of us to not pursue financial innovation that could benefit El Salvador.”

Though Zelaya admitted that the use of Bitcoin as a means of exchange is still low in the country, he said he remains a believer in digital money.

“For some, it’s something new and something they don’t entirely understand, but it’s a phenomenon that exists and is gaining ground and will continue to be around in the coming years,” Zelaya said in the interview.

The finance minister stated that the largest cryptocurrency has brought financial services to a largely unbanked population and attracted investments and tourism.

Although Bitcoin’s price crash has delayed the government’s plans to issue a $1 billion Bitcoin-backed bond, Zelaya said the administration still plans to push ahead with the sale when the market improves.

The executive said the government is still moving forward with plans to build “Bitcoin City” and will announce additional Bitcoin-related projects in the next few months.

Bitcoin as Investment Opportunity

The current market crash is affecting investors worldwide, including the government of El Salvador. The country poured millions of dollars into Bitcoin and made it legal tender nine months ago, encouraging local consumers to use it for day-to-day transactions.

The decision by President Nayib Bukele to make the crypto legal tender means that all businesses are expected to accept it, alongside El Salvador’s other currency, the US dollar.

The government said it has no plans to force businesses to accept the crypto, but they should under the country’s Bitcoin Law.

The current crypto tumble has prompted more questions about El Salvador’s Bitcoin policy, especially the use of almost $100 million of public funds to buy the cryptocurrency.

Each time when the country purchases the crypto, the president celebrates the move. On several occasions this year, when the Bitcoin price falls, Bukele often declares the buying opportunity on Twitter social media.

El Salvador intends to go further with its Bitcoin plan. President Bukele plans to construct a new city – Bitcoin City – to be built at the foot of a volcano that will provide geothermal energy and power with a giant Bitcoin mine.

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44 Countries Converge in El Salvador to Discuss Bitcoin Roll Out, President Bukele Says

by Blockchain News

Forty-four nations are expected to meet in El Salvador to discuss issues touching on banking the unbanked and Bitcoin adoption, according to President Nayib Bukele.

President Bukele tweeted:

“32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, digital economy, banking the unbanked, the Bitcoin rollout and its benefits in our country.”

The May 17th meeting had the financial authorities and central banks from various countries like Madagascar, Kenya, Egypt, Nigeria, Uganda, Paraguay, Rwanda, Jordan, Pakistan, Haiti, Ghana, and Costa Rica.

 

Ever since Bitcoin became legal tender in El Salvador in September last year, the country has crafted a name for itself in the crypto space.

 

For instance, the nation has adopted the “buying the dip” strategy because it does not shy away from accumulating more Bitcoin. El Salvador recently bought the dip by adding 500 BTC to its portfolio. This happened as the crypto trading world was in a sell-off panic mood triggered by Fed’s interest rate hike. 

 

With this latest purchase, the country now holds a total of 2,301 bitcoins worth around $71.7 million, continuously being one of the most encrypted countries in Central and Latin America.

 

However, President Bukele has been criticized for gambling with the nation’s reserves based on this strategy.

 

Nevertheless, El Salvador has shown its unrelenting nature, even reforming laws to grant citizenship by investment to foreign Bitcoin investors. 

 

At the time, President Bukele acknowledged sending at least 52 reforms to the country’s Congress to remove red tape, reduce bureaucracy, and create tax incentives and citizenship in exchange for investments and stability contracts because he intended to make El Salvador a haven of crypto freedom.  

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El Salvador Buys the Dip for another 500 Bitcoins

by Blockchain News

The crypto trading world is in a sell-off panic due to the Fed’s rate hike. However, some see the price slump as a major discount for accumulation and top-up packs.

One of the active investors is El Salvador, where President Nayib Bukele announced Monday that the government bought just 500 bitcoins at an average price of $30,744, spending about $15.5 million.

El Salvador is the first country in the world to accept Bitcoin (BTC) as a legal tender back in September 2021.

With this latest purchase, the country now holds a total of 2,301 bitcoins worth around $71.7 million, Continuously being one of the most encrypted countries in Central and Latin America.

For many, periods of the market slumps, otherwise known as bear markets, are times of concern for most traders. However, for investors who believe in Bitcoin’s future potential as a valuable investment asset, the price crash is often seen as a lost cause.

El Salvador continues to accumulate bitcoin, drawing criticism from some economists. They believe that Bitcoin is a bubble and it is unwise to put national reserves in it.

The International Monetary Fund (IMF) suggests the volatility risk of this major digital currency cannot be reduced. “Given the high price volatility of bitcoin, its use as legal tender presents significant risks to consumer protection, financial integrity and financial stability.

The IMF advocates that the Chivo wallet should be further developed to adequately protect users’ USD and Bitcoin funds. Chivo Wallet aims to provide an operational wallet for the country’s Bitcoin-driven.

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Bitcoin (BTC) $ 26,652.14 1.65%
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