US Department of State Praises Bitcoin’s Role in Boosting El Salvador’s Tourism Amid Paraguayan Power Fee Controversy

• El Salvador’s bitcoin adoption has boosted tourism, making it the fourth fastest-growing tourist destination globally.
• Paraguay’s President Santiago Peña defends a 14% increase in power fees affecting bitcoin mining.

The U.S. Department of State’s 2024 Investment Climate Statements report acknowledges the positive impact of El Salvador’s bitcoin adoption on its tourism sector. This has occurred especially after the country embraced bitcoin as a legal tender in 2021. The report notes that while bitcoin has added prestige to the country, its economic contribution has been minimal. 

The tourism sector has expanded, and El Salvador is now the fourth fastest-growing tourist destination in the world. The data shows that from 2019 to 2023, there was a 35% increase in the number of tourists. In 2023, El Salvador received more than 3. 4 million tourists who contributed $2. 8 billion to the national economy. The report also revealed that as a result of the implementation of bitcoin, there has been an increase in tourism due to the international attention but its economic impact is limited to this publicity. 

The Salvadoran government has made an effort to showcase the country through big events such as the Miss Universe pageant, the Central American Games, and the surfing events. 

El Salvador’s Bitcoin Proposal for Trade with Russia

According to Alexander Ilyukhin, the first secretary of the Russian embassy in Nicaragua, El Salvador has suggested using Bitcoin in trade with Russia to bypass sanctions that have been placed on the country. The proposed work plans to explore the difficulties Russia has in the management of its financial ties with El Salvador, which uses the US dollar in its economy.

In an interview with the Russian state newspaper Izvestia, Ilyukhin explained the challenges that Russia faces in trading with El Salvador, which uses US dollars as its official currency. He stated that with the use of cryptocurrencies, especially Bitcoin, it is possible to conduct business between the two countries. 

The plan to accept cryptocurrency for trade comes at a time when there are ongoing efforts to improve the financial relations between the two countries. Additionally, Ilyukhin underlined the necessity of free payment transactions for the Russian tourists abroad and mentioned that cryptocurrencies can be used as a solution due to the current situation. 

Paraguay’s President Addresses Power Fee Increase for Bitcoin Miners

Recently, Paraguay’s President Santiago Peña has justified the recent move to raise power charges by up to 14%, which has an impact on bitcoin mining. Peña reassured bitcoin mining firms that the increase in fees would not affect their businesses in Paraguay. 

The president noted that although the fees might cut into profit margins, they would not discourage mining activities. He noted that the contracts signed with mining companies provided for an increase in fees in case of an increase in energy costs. Peña also noted that the bitcoin mining industry is not a major source of employment in Paraguay. 

Peña also stated that even with the increase in the fee, the interest of bitcoin companies in Paraguay is still high. The government still believes that the increase will not cause companies to flee since the industry still considers Paraguay to maintain good standing for doing business.