July 13, 2024

El Salvador’s ‘Bitcoin Beach’ celebrates Cryptocurrency surge

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In the coastal town of El Zonte, affectionately dubbed “Bitcoin Beach,” Maria Aguirre, a local shopkeeper, witnessed the recent surge of cryptocurrency with elation, seeing her initial investment rise from $2,200 to approximately $19,000 over four years.

Speaking with AFP, the 53-year-old expressed her joy at the significant price increase, attributing it to the newfound economic stability it brought her. Embracing the digital currency, her store proudly displays a sign declaring “Bitcoin accepted,” alongside traditional payment methods.

Aguirre’s establishment is just one among many small businesses in El Zonte that have integrated bitcoin into their payment systems alongside the US dollar, which supplanted the national currency in 2001. Located southwest of the capital, San Salvador, El Zonte earned its moniker due to its early adoption of cryptocurrency for transactions, facilitated by the “Bitcoin Beach” application. This pioneering spirit resonates with the broader context of El Salvador’s embrace of bitcoin as legal tender in 2021, spearheaded by President Nayib Bukele.

President Bukele’s move to adopt bitcoin as an official currency aimed to invigorate a dollarized economy reliant on foreign remittances, despite cautionary advice from international financial institutions regarding its volatility. While Bukele championed the benefits of bitcoin, citing its recent performance, not all Salvadorans share his enthusiasm. A survey conducted by Central American University revealed that 88 percent of respondents did not utilize bitcoin in 2023, citing distrust of its price volatility.

Blanca Castillo, who operates a store selling flowers and juices, echoes the sentiment of cautious optimism prevalent among some Salvadorans. While appreciative of the financial gains facilitated by bitcoin, the 25-year-old remains wary of its unpredictable fluctuations. Similarly, Rosalina Franco, a restaurant owner, acknowledges the prevalence of bitcoin transactions, particularly among foreign tourists, yet opts to save rather than spend her bitcoin earnings due to the challenges of conducting transactions via phone.

Despite the optimism surrounding bitcoin in El Salvador, concerns persist regarding its volatility and widespread adoption. While some businesses and individuals have benefited from its surge, others remain cautious, highlighting the need for continued observation and adaptation within the evolving landscape of cryptocurrency integration.

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