Saturday, January 28, 2023
  • The ongoing 2022 crypto crash has cost El Salvador over US$40 million
  • President Nayib Bukele announced on his Twitter page that the country has invited 44 countries to discuss the rollout and benefits of bitcoin on May 17
  • In 2021, El Salvador became the first country in the world to officially make bitcoin a legal tender

El Salvador, a Central American country with over 6 million people, made history eight months ago by becoming the first country to legalize and adopt bitcoin as an official currency. The decision to adopt bitcoin came in response to combat hyperinflation and reduce its reliance on the US dollar. However, the adoption process has not been flowery, and the country has experienced a few challenges.

The ongoing 2022 crypto crash has cost El Salvador over US$40 million. In response, President Nayib Bukele announced on his Twitter page that the country has invited 44 countries to discuss the rollout and benefits of bitcoin on May 17. The representation of the countries includes 32 central banks and 12 financial authorities.

The country will host representatives from Africa, Asia and Latin America, with financial inclusion and digital economy among the discussion topics.

The ongoing 2022 crypto crash has cost El Salvador over US$40 million. www.theexchange.africa

The ongoing 2022 crypto crash has cost El Salvador over US$40 million. [Photo/ Twitter]

Read: Nigeria weaponizes the eNaira against crypto adoption

Among the 24 banks in Africa on President Bukele’s list include:

  • Central Bank of The Gambia
  • National Bank of Rwanda
  • National Bank of Angola
  • Bank of the Republic of Burundi
  • Central Bank of Ghana
  • Central Bank of Namibia
  • Central Bank of Uganda
  • Central Bank of the Republic of Guinea
  • Central Bank of Madagascar
  • Central Bank of Egypt
  • Central Bank of Nigeria
  • Ministère de l’Economie, des Finances et du Plan du Sénégal (Ministry of Economy, Finance and Planning of Senegal)
  • Bank of Mozambique
  •  Bank Al-Maghrib (Morocco)
  • Bank of Sierra Leone
  • Bank of Zambia
  • Central Bank of Lesotho
  • Central Bank of Liberia
  • Central Bank of Sudan
  • Ministry of Finance, Zambia
  • Bank of Malawi
  • Central Bank of Mauritania
  • Banque Centrale du Congo
  • Direction Générale du Trésor, Ministère des Finances et du Budget, Madagascar (Directorate General of Treasury, Ministry of Finance and Budget, Madagascar)

Read: A crypto crash to wipe out all fake protocols in the market

The Asian and Latin representatives include:

  • Central Bank of Armenia Bangladesh Bank
  • Bank of the Republic of Haiti
  • Central bank of São Tomé and Príncipe
  • The central bank of Paraguay
  • Central Bank of Eswatini
  • Ministry of Finance of Eswatini
  • Central Bank of Jordan
  • Comisión Nacional de Bancos y Seguros de Honduras (National Banking and Insurance Commission of Honduras)
  • Maldives Monetary Authority
  • Nepal Rastra Bank (The Central Bank of Nepal)
  • Sacco Societies Regulatory Authority (SASRA) Kenya
  • State Bank of Pakistan
  • Superintendencia General de Entidades Financieras de Costa Rica (The General Superintendency of Financial Entities of Costa Rica)
  • Superintendencia de la Economía Popular y Solidaria de Ecuador (Superintendence of the Popular and Solidarity Economy of Ecuador)
  • Central Bank of El Salvador
  • Central Bank of Jordan
  • Superintendencia de Bancos de la República Dominicana (Superintendency of Banks of the Dominican Republic)
  • Financial Regulatory Commission of Mongolia
  • Palestine Monetary Authority Reserve

The country has also added bitcoin to its balance sheet, with a total reserve of roughly 2,301 BTC – worth almost US$70 million at current market rates.

A recent price crash means that El Salvador’s crypto holdings have fallen in value by around 28 per cent against the dollar, though the biggest purchase of 500 BTC came after President Bukele “bought the dip” when bitcoin was at its current price.

In 2021, El Salvador officially made bitcoin legal tender. Nayib Bukele, the country’s president, said that the move would offer digital banking services to the unbanked population, who make up about 70 per cent of the population. Twenty-one days after the announcement by President Bukele, Chivo (the government-backed bitcoin wallet) had 2.1 million Salvadorans using it. The wallet reported more users than customers registered under any Salvadoran bank. Within 45 days, the wallet signed over 4 million new users out of 6.5 million people.

The El Salvador meeting is promising as it targets to popularize the benefits of adopting bitcoin, which has received backlash from many governments.

National administrations globally are using central bank digital currencies to fight the nationalization of bitcoin.

In conclusion, blockchain-cryptocurrency technology is happening, and we are curious to see how many countries will honour the invitation and make concrete decisions toward bitcoin adoption.

Read: Is crypto addiction having the same effects as drug abuse?

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