El Salvador made history in September 2023 when it became the first country to adopt bitcoin as legal tender. The move was met with mixed reactions from the international community, but for the vice-president of El Salvador, Felix Ulloa, it was a bold step towards the country’s rebirth.
Ulloa, who is also the head of the National Commission for Digital Transformation, spoke to Forbes Digital Assets about the benefits and challenges of bitcoin adoption in El Salvador. He shared his vision of how bitcoin can help the country overcome its economic and social problems, as well as foster innovation and inclusion.
According to Ulloa, one of the main motivations for adopting bitcoin was to provide financial access to the millions of unbanked Salvadorans, especially those who rely on remittances from abroad. He said that bitcoin can reduce the costs and risks of sending and receiving money across borders, as well as increase the financial literacy and empowerment of the people.
“There were reactions in both directions. Some multilateral organizations initially made objections. Still, the enthusiasm that started in the sphere of the digital economy, with bitcoiners, where El Salvador, having positioned itself as the first country to adopt a cryptocurrency as legal tender, was at the forefront and attracted many investors who are in fact installed in Salvador,” he explained in an interview with Forbes
Ulloa also highlighted the potential of bitcoin to attract foreign investment and tourism to El Salvador, as well as to create new opportunities for entrepreneurs and innovators. He said that the government is working to create a favorable environment for bitcoin-related businesses, such as mining, trading, and development. He also mentioned that the government is supporting educational initiatives to train young people in digital skills and blockchain technology.
Ulloa acknowledged that bitcoin adoption is not without challenges, such as volatility, security, and regulation. He said that the government is aware of these issues and is taking measures to mitigate them. For example, he said that the government has created a $150 million fund to guarantee the convertibility of bitcoin to dollars, as well as a network of ATMs and kiosks to facilitate transactions. He also said that the government is collaborating with international organizations and experts to ensure compliance with anti-money laundering and anti-terrorism financing standards.