El Salvador’s Ambitious Bitcoin and AI Plans Could Boost GDP by 10 Times by 2029
Renowned CEO Cathie Wood of ARK Invest predicts that El Salvador’s adoption of Bitcoin and AI could lead to a tenfold increase in its GDP within the next five years.
During a recent meeting between President Nayib Bukele, Cathie Wood, Bitcoin advocate Stacy Herbert, US economist Arthur Laffer, and ARK Invest research associate Marc Seal, the potential opportunities for Bitcoin and AI in El Salvador were discussed.
Cathie Wood commended President Bukele’s efforts to transform El Salvador into a thriving hub for the Bitcoin and AI communities, which she believes are two of the most significant economic and technological revolutions in history. She stated, “President Bukele’s determination is the reason I believe that its real GDP could scale 10-fold during the next five years.”
Wood emphasized the potential for El Salvador’s economy to flourish under these initiatives, citing supporting statistics and suggesting that its real GDP could reach $300 billion, putting it on par with countries like Romania, the Czech Republic, and Chile.
El Salvador has already made significant strides in the crypto space, becoming the first country to adopt Bitcoin as legal tender. In addition, the government has eliminated taxes related to tech innovation and removed income tax for foreign investments and remittances. The country currently holds 5,764 Bitcoin in its treasury, valued at $396.2 million.
These initiatives have transformed El Salvador into a cryptocurrency and innovation hotspot, attracting attention from investors and international corporations. In fact, Google recently entered into a $500 million strategic partnership with El Salvador in April 2024.
As a result, El Salvador has experienced unprecedented economic growth, with its GDP reaching $32.4 billion in 2022, a significant increase since President Bukele took office in 2019.
To further boost the country’s economic growth, the government aims to increase Bitcoin and AI adoption. This is particularly important as interest in AI-related cryptocurrencies has surged by 257% in the early months of this year.
However, while institutional adoption of Bitcoin has been successful, the local population’s adoption has been slower. In 2023, only 12% of the local population used Bitcoin for transactions, down from the previous year. Challenges such as a tech-illiterate population, lack of merchant enforcement, and issues with the rollout of the Chivo Wallet have hindered adoption.
Nevertheless, the government is actively working to increase crypto investment within the country. In December 2023, El Salvador initiated a citizenship-by-investment program that grants residency visas and citizenship to individuals who invest $1 million in Bitcoin or Tether in the country.
El Salvador’s ambitious plans for Bitcoin and AI adoption have the potential to revolutionize its economy and propel it to new heights. With continued efforts and support, the country could achieve remarkable economic growth and solidify its position as a global leader in the crypto and AI sectors.
