El Salvador’s Economic Evolution Led By Tourism & Bitcoin

In its most recent report, the business division of the institution, Santander Corporate & Investment Banking, highlighted a 30% year-on-year increase in tourism to El Salvador, much of it driven by bitcoin. Grupo Santander mentioned that bitcoin (BTC) is playing a significant role in the economic transformation that El Salvador is undergoing, as the digital asset is attracting visitors to the country and is simultaneously generating notable increases in revenue through this channel.

This figure was disclosed by El Salvador’s Minister of Tourism, Morena Valdez, who stated months ago that the Bitcoin Law boosted visits to the country. She also specified that the economic impact generated by visitors exceeded the government’s expectations after the legal adoption of BTC.

It should be remembered that since September 2021, El Salvador is the first country in the world to grant legal tender status to bitcoin. This occurred after the Bitcoin Law, introduced by President Nayib Bukele, was debated and approved by the Legislative Assembly.

Santander’s report indicates that most tourists visiting El Salvador come from the United States, and tourist flows are growing at a faster rate than in the Dominican Republic, which receives about 7 million visitors annually.

According to the analysis, the arrival of American tourists (including bitcoiners) has doubled compared to the levels seen in 2019. The numbers have gone from 281,000 visitors from the U.S. in the first half of that year to 483,000 in the same period in 2023.

Both Nayib Bukele and the National Bitcoin Office applauded Santander’s acknowledgment of the boost in tourism in El Salvador, much of which is related to bitcoin being legal tender in the nation.

“United States represents potential tourism (to El Salvador) of residents and also BTC tourists due to the convenience of geographical proximity and dollarization,” states Santander Corporate & Investment Banking.

However, bitcoin tourism is not limited to American visitors. Due to BTC’s legal status in the country, El Salvador has received visitors from all over the world (even from Japan), all attracted by the Central American nation’s economic reality.

Lower crime rates also encourage tourism Santander Corporate & Investment Banking’s report also reflects that the increase in tourism is due to the low crime rate reported by El Salvador, thanks to the country’s government security policies.

Specifically, Santander points out that the crusade against Salvadoran criminals has yielded “clear growth dividends, including an immediate increase in tourism. As well as the return of the Salvadoran diaspora through a wave of reverse migration.”

The research determines that, even when the measures taken by President Nayib Bukele “are not too popular among the Biden Administration,” it is proven that they “can not only reduce but also reverse American migratory pressures.”

Among these measures is the State of Exception, which has resulted in the arrest of thousands of gang members and, consequently, an increase in the security of the Salvadoran population.

In this context, Santander’s report estimates that tourism revenues to El Salvador doubled to reach 10% of GDP during the first quarter of 2023. However, they highlight that Nayib Bukele’s government has not confirmed this last projection.

El Salvador’s gross domestic product (GDP) has grown due to tourism boosted by bitcoin and security. Source: Santander. El Salvador confirms increase in tourism thanks to bitcoin The growth of Salvadoran tourism driven by bitcoin has already been reported by the government. The Minister of Tourism, Morena Valdez, recently said that more than 1 million people had visited El Salvador in less than a year.

As reported by CriptoNoticias, the official indicated that among the strategies used to increase tourism is the one related to the legal status of bitcoin. According to the minister, many bitcoiners go to El Salvador to learn what it’s about.

The country’s president, Nayib Bukele, confirmed a few months ago that bitcoin had caused a 95% increase in tourism, allowing a “relaunching of El Salvador’s image.”