In El Zonte, Bitcoin’s record price changes lives

On a beach in El Salvador frequented by surfers, trader Maria Aguirre says it was “great” to invest $2,200 in buying bitcoin four years ago because now, with the cryptocurrency rising, she has are $19,000. In 2021, at the initiative of President Nayib Bukele, El Salvador was the first country in the world to establish Bitcoin as legal tender, which has also created happy accounts in recent times. Bukele celebrated last week that the government had hoarded 5,689 bitcoins, worth a total of $406 million, but few Salvadorans use the cryptocurrency, whose price has hit a record high above $72,000. “Today the growth has been very good and I’m very happy,” Aguirre told AFP at his small business selling food and soft drinks on El Zonte beach. With a broad smile, the businessman serves soft drinks and food to customers buying sweet bread in his “Mary Store,” which displays a small sign that reads: “Bitcoin accepted.” Located 58 km southwest of San Salvador, this beach has been nicknamed “Bitcoin Beach” for being the first place in the country to massively welcome the use of cryptocurrencies for payments. It is a popular weekend destination, although it is not a cheap place, and many of its 3,000 residents are foreign hostel owners. “Bitcoin Beach” is also the name of the application used to conduct transactions in this area. El Zonte also has many users of cryptocurrencies on the beaches, such as El Tunco and El Sunjal. But the situation has not been replicated at the national level.

extraordinary circumstances

The house made of bricks and zinc sheets serves as a business and home for Aguirre. It is located on a narrow street, surrounded by other small businesses that in addition to dollars accept bitcoins, legal tender since 2001, when El Salvador abolished its national currency, the colón. Bitcoin has changed the life of this 53-year-old businessman as it has given him “better economic stability,” so he hopes to “grow” his business. Aguirre has been able to purchase washing machines, stoves, refrigerators, and furniture for his home and store thanks to his cryptocurrency earnings. In El Zonte, people started using Bitcoin long before Bukele legalized it on September 7, 2021, and the cryptocurrency is used to make many payments, even for soft drinks or Also to purchase some eggs. But this popular beach, where many Salvadorans and tourists go to ride the waves, is an exception within the country. A survey by the private Universidad Centroamericana in January showed that 88% of Salvadorans did not want to use Bitcoin during 2023. Bukele introduced cryptocurrencies to bank a population that was mostly excluded from the financial system, but this situation has not changed much since then. ,

“up and down”

In another part of El Zonte, across the street, Blanca Castillo has a shop selling artificial flowers and natural juices. He is also happy with Bitcoin, as he claims it has brought him “profits”. However, the 25-year-old trader warns that there is always a risk of losing. “When you see that the value of a currency will drop, you think you are going to lose (…), you have to be aware of the activity of cryptocurrencies,” says Castillo. In fact, the cryptocurrency was trading below $17,000 at the end of 2022. Sitting on a chair in a small restaurant, its owner Rosalina Franco serves several customers every day who pay with Bitcoin, mostly foreign tourists. “I can’t use the phone to make transactions,” so “I save the fees I charge in Bitcoin, I don’t spend it, it’s a savings,” says the 70-year-old woman, who has “benefited from “Have received growth. Of quotation. When Bukele introduced Bitcoin, he also wanted family remittances from abroad – a key component of Salvador’s economy – to be channeled through the digital wallet to reduce shipping costs, but this did not happen. According to the Central Reserve Bank, in 2023, only 1% of the $8,181 million in remittances came through digital wallets. “It’s clear that people continue to use more traditional methods of sending (remittances) and that has a lot to do with people’s distrust of the volatility of cryptocurrencies,” said César, an independent economist. Hasn’t worked.” Villalona told AFP.