El Salvador has reaped a substantial $84 million (approximately R1.57 billion) in unrealized profits from its Bitcoin investments initiated in September 2021. The country’s bold foray into cryptocurrency has seen its Bitcoin treasury grow by 250% over the past year, reaching a value of over $206 million (around R3.85 billion) as of Tuesday. This marks a 69% gain from its initial investment, with the country now holding 2,681 BTC, acquired at an average price of $42,600 (roughly R797,054) across 12 transactions.
This financial triumph followed El Salvador’s historic decision in 2021 to adopt Bitcoin as legal tender, placing it on par with the US Dollar. This pioneering “Bitcoin Law” has enabled payments for goods, services, and taxes in Bitcoin, setting a precedent for cryptocurrency integration into a national economy.
El Salvador’s experience with Bitcoin provides an interesting case study for South Africa, where cryptocurrency is gaining traction despite the region’s historically small market size. African countries, including Nigeria, which ranks high on the Global Crypto Adoption Index, demonstrate the growing significance of digital currencies as an alternative store of value amidst rising inflation and debt. Sub-Saharan Africa’s residents are increasingly turning to cryptocurrencies like Bitcoin, drawn by its potential to preserve wealth in uncertain economic times.
President Nayib Bukele has highlighted that El Salvador’s Bitcoin strategy extends beyond its treasury, generating additional revenue through a citizenship passport program that benefits local businesses by converting Bitcoin to US Dollars, as well as through Bitcoin mining and government services. The “Freedom VISA” initiative launched in December further underscores this strategy, offering residency to individuals who invest a minimum of $1 million (approximately R18.76 million) in Bitcoin or tether (USDT) stablecoins, with the possibility of achieving full citizenship.
This scenario presents an opportunity for South Africa to explore the potential of integrating cryptocurrency more deeply into its economy, drawing lessons from El Salvador’s Bitcoin law and investment strategy. By considering policies that embrace cryptocurrency, South Africa could leverage digital assets to enhance financial inclusion, stimulate economic growth, and provide its citizens with a secure alternative means of saving.
This website uses cookies.
