Main article: Countries of the world
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2021: Net outflow over 4 years
Mortality
Traffic safety
Drug deaths
Economy
GDP
2023: 21.6% of GDP comes from remittances from the US
National debt
2023: State debt - 77% of GDP
2017: State debt - 68% of GDP
No own currency
El Salvador - small states in Central America - does not have its own currency, and has been used as a means of payment here American dollar since 2021. bitcoin
2024: Taking a $1.4 billion loan from the IMF to reduce the impact of bitcoin on the economy
On December 18, 2024, El Salvador entered into an agreement with the International Monetary Fund (IMF) on lending. The agreement provides for a change in the conditions for using bitcoin as legal tender, as well as measures aimed at reducing the state deficit.
In El Salvador, bitcoin has the status of an official means of payment along with the US dollar. However, such a policy caused disagreements between the authorities of this country in Central America and the IMF, which led to a decrease in credit ratings, frightened investors and provoked a sharp drop in bond prices.
In accordance with the agreement, El Salvador will receive a loan of $1.4 billion to implement a comprehensive reform program. In exchange, the country's authorities agreed to take measures that would change the rules for using bitcoins and help reduce the ratio of debt to GDP. Under the terms of the contract, in the private sector, the use of the named cryptocurrency as legal tender becomes voluntary. For the public sector, participation in bitcoin-related economic activities, as well as transactions and purchases in cryptocurrency, will be limited.
Transparency, regulation and oversight of digital assets will strengthen to ensure financial stability, protect consumers and investors, and maintain financial integrity. In addition, the government's participation in the Chivo electronic crypto wallet will gradually curtail. Taxes will be accepted only in US dollars as the national monetary unit of El Salvador.
 | The IMF-backed program aims to strengthen fiscal and external stability and promote conditions for stronger and more inclusive growth, the fund said in a statement.[1] |  |
2022
Equating bitcoin with money turned into a failure
At the end of June 2022, the government's cryptocurrency treasury was halved, the introduction of bitcoin throughout El Salvador is not gaining momentum, and the country needs a lot of cash to fulfill debt payments in the amount of more than $1 billion in 2023. This happens against the background of a drop in the price of bitcoin by more than 70% from the peak reached.
For several months, the use of the first cryptocurrency in El Salvador did not take on a mass nature. This is evidenced by the data of a representative survey of the American organization National Bureau of Economic Research. El Salvador put his economic salvation on Bitcoin, but so far this adventure does not live up to the hopes of President Nayib Bukele.
The study showed that 60% of those who downloaded the application did not use it after receiving a $30 registration bonus. 95% of users never paid taxes in cryptocurrency through Chivo, and 89% did not receive money transfers through the application. Despite the fact that the authorities obliged the business to accept payment in bitcoin, only 20% of the country's companies added such an option. Of those who did, 88% prefer to convert funds into dollars. 12% of such companies store cryptocurrency.
Meanwhile, El Salvador's economic growth has plummeted, its deficit remains high and the country's debt-to-GDP ratio will reach nearly 87% in 2022, raising concerns that El Salvador is unable to pay off its loan obligations. The government's unrealized paper losses on bitcoin amount to about $50 million, which, according to the country's finance minister, is less than 0.5% of the state budget. In general, the entire experiment and all the costs associated with it cost the government of El Salvador about $374 million.
In an analytical note JPMorgan , experts warn that in 2021, El Salvador's Eurobonds entered troubled territory, and the data S&P Global show that the cost of insurance against default on sovereign debt reached a multi-year maximum. The country's debt-to-GDP ratio is nearly 90%, and debt rises in price by about 5% a year. The country also has a huge deficit and no plans to reduce it, whether through tax increases or substantial spending cuts. JPMorgan International Monetary Fund (IMF) and warn that El Salvador is on an unsustainable path, with gross funding needs exceeding 15% of GDP from 2022 and public debt reaching 96% of GDP by 2026 under current policy.
Of those users who used the state crypto wallet, some had technical problems with the Chivo application. Others have reported cases of identity theft where hackers used their national identification number to open an e-wallet to get the free $30 offered by the government as an incentive to enter.
Another hope for Chivo's wallet was that it would help save hundreds of millions of dollars in remittance fees. But as of June 28, 2022, only 1.6% of remittances were sent through digital wallets. As for the adoption of bitcoin by merchants, according to a study published in March by the El Salvador Chamber of Commerce and Industry, 86% of enterprises have never sold in bitcoin.[2]
Losses from bitcoin investments and the purchase of 80 new coins
At the end of June 2022, it became known that the Salvadoran authorities were acquiring another 80 bitcoins at $19,000. Since September 2021, they have purchased 2,301 coins for $103.9 million, but its portfolio by the beginning of July 2022 is 55% cheaper than the purchase price and costs $46.6 million.
US senators demand an investigation into El Salvador's transition to Bitcoin
In February 2022, Salvadoran President Nayib Bukele criticized a group of US senators who demanded an investigation into the risks associated with his country's transition to Bitcoin, telling them that they should stop interfering in his country's affairs.
"OK boomers... You have no jurisdiction over a sovereign and independent country, "Bukele wrote in a Twitter post addressing the senators. 'We're not your colony, your backyard or your front yard. Don't get into our internal affairs. "
Bukele's comments came after Senate Foreign Relations Chairman Bob Menendez, a Democrat, and Republican Sen. Jim Risch introduced a bill requiring the State Department to report El Salvador's passage of BTC as legal tender and a plan to mitigate potential risks to the U.S. financial system.
2021: Approval of Bitcoin as legal tender and inclusion in the reserves of the Central Bank
Salvadoran President Nayib Bukele initiated a law that would make his country the first sovereign state in the world to adopt Bitcoin as legal tender.
In a video broadcast of a large-scale conference in June 2021 in Miami Bitcoin-2021, which was announced as the largest event in the crypto industry in history, the president announced El Salvador's partnership with digital wallet company Strike to create the country's modern financial infrastructure using Bitcoin technology.
El Salvador's central bank will also accept Bitcoin as part of its reserves, while citizens will be allowed to freely transact with the main cryptocurrency.
Days later, El Salvador's Congress overwhelmingly approved a bill introduced by the president to recognize bitcoin as the official currency. Thus, the small Central American country became the first state in the world to take this step. Bitcoin will now run in the country on par with the US dollar, which has been El Salvador's only official currency since 2004.
The world's largest Bitcoin experiment began in the small surf town of El Zonte in El Salvador a few years before. In 2019, a small team of Salvadoran volunteers and an American expat began to transfer the local economy to Bitcoin.
In 2021, workers receive salaries and pay Bitcoin bills, tourists can buy pupusas using the special Bitcoin payment application, and public projects are funded by donations to Bitcoin.
In fact, the "Bitcinization" of El Salvador began a long time ago. President Bukele began to engage in cryptocurrency even before winning the elections in 2019. He even hinted at his desire to accept it in 2017, when he was mayor of San Salvador, tweeting: "We will use Bitcoin."
Later, at the end of July 2021, Moody's downgraded El Salvador's rating due to the weakening of the governing bodies in the country - partly due to the adoption of bitcoin as an official means of payment. The cryptocurrency law and other measures threatened to reach an agreement with the International Monetary Fund, from which El Salvador wants to receive $1 billion. Representatives of the agency reported that they found "macroeconomic, financial and legal problems" in this initiative.
Bank of America, in a July 2021 Global Research report, described 4 potential benefits of El Salvador's Bitcoin strategy.
Analysts at the bank said El Salvador's decision to recognize BTC as legal tender could simplify remittances, help digitize finances, give consumers more choice and open the country to U.S. firms[3] miners].
Remittances account for a staggering 24% of El Salvador's GDP, but much of that goes to transaction fees.
"Using Bitcoin for money transfers could potentially reduce transaction costs compared to traditional money transfer channels," the report said.
In August 2021, the Salvadoran authorities began installing Bitcoin ATMs that allow citizens of the country to convert cryptocurrency into US dollars and withdraw it in cash.
It has been reported that the government will install 200 such ATMs that will initially accompany its digital wallet called Chivo, meaning "cool" in local slang, President Nayib Bukele said.
Operations will be carried out without commission, he said, adding that there will also be 50 finance branches across the country to withdraw or deposit money.
In early September 2021, the country previously buys 400 Bitcoin, the market value of which at current prices is about $20 million. After buying the first batch of 200, the country plans to buy "much more," President Nayib Bukele said.
In the same month, he stated that El Salvador bought another 150 Bitcoin. The country now has 700 BTC.
In October 2021, the Salvadoran authorities bought 420 Bitcoin worth about $25 million, said President Nayib Bukele. The purchase took place at the time of the fall in the cryptocurrency exchange rate.
At the end of October, El Salvador owns 1120 BTC worth over $66 million.
Unemployment
2020: Unemployment rate - 9.4%
Incomes of the population
2022: Share of citizens with a budget of less than $5.5 per day
Agriculture
2019: Low use of pesticides in agriculture
Alcohol market
Minimum age to purchase alcoholic beverages
Consumption
Meat
2023: Poultry meat is the most consumed type of meat
R&D
2020: R&D costs - $43M
Energy carriers
2020: Energy consumption per capita
and
Health care
Maternity leave
in
2020: Duration of guaranteed paid sick leave 6 months or more
Culture
Language
Sport
2022: The most popular sport is football
in
Crime
El Salvador is an important transfer point for transporting drugs from South America to Northern. As of 2021, 4-5 tons of cocaine pass through El Salvador alone every year.
Drug trafficking and other types of criminal business are controlled by the leading organized crime groups of Central America - MS-13 and Barrio-18 - the number of their members in El Salvador is estimated at about 60 thousand people.
Prisons
2023: El Salvador's President Nayib Bukele fights a "war on gangs," jailing 1.6% of the country's population
El Salvador's President Nayib Bukele is waging a "gang war," jailing 1.6% of the country's population and turning the country into one of Latin America's safest. With a possible second term just around the corner, those numbers could soar.
This fight has made it extremely popular, despite human rights groups condemning mass arrests and other civil liberties violations.
2022: Minimum age for children to be jailed
2018: Number of prisoners per 100 thousand citizens
History
2021
McDonald's in El Salvador began selling food for bitcoins
On August 7, 2021, it was reported that McDonald's began accepting payments in bitcoins (BTC) through the Lightning Network. Journalist Aaron van Virdum reported this after visiting a McDonald's restaurant in El Salvador, where he was presented with a printed QR code directing him to the Lightning Network. McDonald's has about two dozen restaurants in this Latino country. Read more here.
The authorities of El Salvador distribute bitcoins to residents just like that
At the end of June 2021, Salvadoran President Nayib Bukele announced that every adult citizen of the country will receive bitcoins 30 dollars when downloading and registering on a government application to work with. cryptocurrency Thus, El Salvador will make bitcoins legal tender. The government also hopes that the massive use of cryptocurrency will help attract investment to the country. More. here
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