How is the progress of El Salvador's Bitcoin City?

In the global cryptocurrency space, El Salvador has become a focal point of attention. This small Central American country is known worldwide for its bold Bitcoin policy.

In 2021, amid a turbulent global monetary environment, Salvadoran President Bukele made a remarkable decision: to make Bitcoin the legal tender of the country. This move made El Salvador the first country in the world to grant legal status to a cryptocurrency. The government also plans to build a "Bitcoin City" based on Bitcoin and launch an electronic wallet to encourage public use.

This decision has sparked widespread discussion globally. Supporters and critics are closely watching this social experiment in El Salvador, hoping to gain insights from it.

However, the implementation process was not smooth sailing. Factors such as the high volatility of cryptocurrencies and technical issues with electronic wallets led to public dissatisfaction with the new policies. By the end of 2022, the price of Bitcoin had plummeted, casting a shadow over El Salvador's plans.

Nevertheless, as the market warms up, the global attitude towards Bitcoin is gradually changing. Several countries are starting to consider incorporating Bitcoin into their national reserves. Against this backdrop, El Salvador's decision seems to be showing its foresight.

According to reports, El Salvador currently holds nearly 6,000 Bitcoins, with a market value of about $580 million. The government is also actively promoting Bitcoin education in the public sector and is even considering providing Bitcoin salaries for civil servants.

However, the public's acceptance of Bitcoin remains low. A survey shows that only 7.5% of respondents indicated that they use cryptocurrency for transactions, while 92% admitted they have never used cryptocurrency.

From the economic data, El Salvador's Bitcoin vision still has a long way to go. The Bitcoin held by the country accounts for only 1.5% of its GDP, and cryptocurrency remittances are also on a downward trend.

Despite this, El Salvador continues to uphold its Bitcoin strategy. The government is planning to build a new capital market around Bitcoin and introduce more supportive policies. Recently, a company conducted its initial public offering of tokenized US Treasury bonds under the legal framework of El Salvador.

Juan Carlos Reyes, the chairman of the National Digital Asset Commission of El Salvador, believes that the country is at the forefront of cryptocurrency regulation compared to most countries. He emphasized that El Salvador is creating a tailored regulatory framework for cryptocurrencies rather than simply extending existing rules.

Reyes stated that the regulatory agency in El Salvador has adopted a technology-driven approach, which has impressed many cryptocurrency companies seeking to operate in the country. He believes that as a small country, El Salvador is more flexible in establishing a new regulatory system.

For the future, Reyes is particularly optimistic about the tokenization of real-world assets (RWA), believing that this will bring more opportunities for ordinary investors. He emphasized that this is the first time developing countries have the chance to lead the financial revolution, rather than passively following.

Despite facing numerous challenges, El Salvador's Bitcoin journey continues. As the global cryptocurrency landscape evolves, this small country's bold experiment may provide valuable lessons and insights for other nations.