El Salvador has set an ambitious goal to multiply its GDP by ten times within the next five years, driven by the integration of Bitcoin and artificial intelligence.
During a meeting with President Nayib Bukele, ARK Invest CEO Cathie Wood expressed her optimism about the country’s potential, and shared she believes that if El Salvador continues its current work with Bitcoin and AI adoption, its GDP could reach $300 billion by 2029.
The Bitcoin President
Wood highlighted President Bukele’s determination to position El Salvador as a hub for Bitcoin and AI as key factors in this potential growth.
The country want to leverage two significant economic and technological revolutions to transform the nation’s economy, and Wood detailed the figures demonstrating how El Salvador could achieve this increase in GDP.
Under Bukele’s leadership, El Salvador’s GDP has already seen huge growth, rising to $32.4 billion in 2022, a 30% increase since he took office in 2019.
Achieving a GDP of $300 billion would raise El Salvador’s economy to levels comparable with countries like the Czech Republic, Romania from the EU, and Chile in South-America.
IMF criticism
Despite facing international pressure, mostly from the IMF, Bukele has adopted Bitcoin, making it a legal tender in the country.
Currently, El Salvador holds 5,764 Bitcoins, valued at approximately $400 million.
Bukele has also implemented policies to support tech innovation, including eliminating taxes on tech advancements and foreign investments, which led to Google establishing a $500 million strategic partnership with the country.
Not an easy ride
Of course, challenges are still exist in retail Bitcoin adoption, because issues such as a largely tech-illiterate population, inadequate merchant enforcement, and problems with the Chivo Wallet rollout in 2021 have slowed down the progress.
A survey by José Simeón Cañas Central American University revealed that only 12% of the local population used Bitcoin for transactions in 2023.
El Salvador’s ambitious goals depend on overcoming these challenges and effectively leveraging Bitcoin and AI.
The potential implications are significant, setting a precedent for other nations considering similar strategies. Whether El Salvador can navigate the obstacles, only time will tell.
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