Bitcoin transactions in El Salvador during May this year increased by more than four times compared to a year ago, but fiat remittances still represent the vast majority of transactions in the country, according to a report by Reuters.
Fast facts:
- El Salvador became the world’s first nation to pass legislation earlier this month making Bitcoin legal tender, meaning BTC can be used to pay federal taxes, must be accepted by businesses and will not be subject to capital gains taxes in the country.
- Monthly BTC remittances of under US$1,000 totaled US$1.7 million in May compared to US$424,000 the year before. Transfers of this size are often used as a proxy to determine the number of transfers from Salvadoran ex-pats working abroad. In 2019, nearly US$6 billion, or one-fifth of El Salvador’s GDP, was made comprised of remittances — one of the highest ratios in the world according to the World Bank.
- President Nayib Bukele has said making BTC legal tender will help reduce the cost of making such transactions for El Salvador’s 6.5 million citizens ad will help address the country’s significant unbanked population.
- It has also been reported Bukele has instructed state-owned energy company LaGeo — which leverages the country’s active volcanos to create geothermal energy — to make their facilities available to crypto mining operations.