El Salvador’s Sustainable Mining Boosts Crypto Holdings

El Salvador, a small country in Central America, is one of few nations to have adopted crypto at the national scale.

El salvador’s BTC Holdings

The country has invested its national capital in Bitcoin and is also involved in in-house Bitcoin mining. The cryptocurrency portfolio of the country has crossed $350 Million.

On May 13, the national government’s branch, the ‘Bitcoin Office,’ reported owning 5,750 Bitcoins. The national BTC wallet added another 473.5 Bitcoins Wednesday (worth over $29.29 Million at press time when BTC was trading at $61,860).

This addition comes amid the installation of renewable energy based mining facilities.

El Salvador – A Country That Believes in Bitcoin

The current President of El Salvador, Nayib Bukele, is pro-crypto. In his tenure, he has executed several legislative changes to adopt and regulate the ownership of Bitcoin. Bukele has proven to be a taskmaster – the government under his leadership has cracked down on crime and he recently even ordered a corruption probe against his own ministers.

In September 2021, El Salvador became the first country in Latin America to adopt and regulate Bitcoin as legal tender. This move highlighted the country’s commitment to promoting innovative financial growth and fostering economic growth. However, this move has attracted much criticism against government officials.

The national government is buying Bitcoin daily until and unless the price of Bitcoin reaches a level that makes it unaffordable in exchange for fiat currencies.

Source: bitcoin.gob.sv

The above image shows the buying activity of the government.

Following this strategy and consistent Bitcoin purchases, the Bitcoin portfolio in El Salvador now holds 5,750 Bitcoins, reaching a portfolio size of $355.695 Million at the prevailing market price at the time of writing.

Out of this significant Bitcoin holding, not all the coins are bought in the open market. The country has mined over 470 coins in the last 3 years since establishing a Bitcoin mining facility.

Environmental Impact of El Salvador’s Bitcoin Mining

In June 2023, El Salvador announced plans to invest $1 Billion in a public-private partnership to create one of the world’s largest Bitcoin mining farms. It is backed by renewable energy developer Volcano Energy and other renowned crypto companies.

El Salvador’s crypto-mining facilities run on geothermal energy. It used its volcanoes for its energy requirements, as they were an abundant and constant energy source for the country. The country’s mining operations are much more sustainable and cost-efficient than those of other countries involved in the activity.

It had an initial capital of $250 Million, and funds were utilized for an estimated power generation of 102 MW, of which only 1.5 MW was used for crypto-mining activities. It is much less than the mining facilities based in other countries because of the use of renewable energy sources.

Cryptocurrency mining requires a large amount of energy for computing and cooling data processing centers. Thus, most of the crypto mining companies in the world are being scrutinized and regulated for energy consumption and carbon emissions.

The Transition to Crypto is Holding Up Fine

So far, the country has favorable laws for crypto investors and other bodies involved in operations related to Bitcoin or even cryptocurrencies. Bukele supports activities crypto based enterprise with the aim of facilitating the creation of a conducive environment for a full fleged crypto economy.

Bukele has also eliminated the income tax for international investment from 30%. The objective of this is to attract foreign investment and support the country’s economy.

El Salvador has also launched a backup-proof website that will possess multiple tools to monitor the country’s Bitcoin holdings using on-chain data.