The world is preparing for Donald Trump to assume the presidency of the United States in a few days. And with this, expectations grow among members of the bitcoin community that a new stage will begin with favorable regulation for the development of the sector.
Trump’s promises aim to create a kind of paradise for cryptocurrencies in his country, with which he assures that he will turn the US into a hub the Bitcoin.
If things happen that way, the northern country would not only become a center of attraction for entrepreneurs and cryptocurrency lovers, but would enter into competition with other jurisdictions known for their ecosystem-friendly regulations. And one of them is precisely El Salvador.
Hence, there is concern about the ways in which Trump’s presidency may affect the bitcoiner strategy deployed by Nayib Bukele in the Central American country. This, based on the idea that Trump’s victory so far it has been favorable for Bukele’s plan.
It stands out how the bullish rally, which gained momentum last year’s end with Trump’s victory – and which caused the digital currency to be quoted above USD 100,000 – made El Salvador’s BTC treasury grow.
As reported by NoticiasVE, the unrealized profits from purchases by the Salvadoran government they shot up by more than 130%.
It is thus observed – in the first instance – that Trump’s pro-cryptocurrency stance and the appointment of a new president of the Securities and Exchange Commission (SEC), along with other officials favorable to cryptocurrencies, have boosted the market.
A record BTC rally that has been a lifeline for Bukele, making his bet on BTC a success story for the president.
Economic recovery could be affected
However, there are those who fear that a probable boom in the Bitcoin industry in the United States will go to the detriment of economic recovery plans of Bukele. This, considering that the economic issue is one of Bukele’s main focuses in his second term.
“We are not really seeing the peace dividend in terms of a rebound in economic activity,” Mauricio Choussy, former president of the Salvadoran central bank, told the media.
«The hard truth is that, even with improvements in security, El Salvador’s economy remains one of the weakest in the region.»
Since [Bukele] took office in 2019, El Salvador’s GDP growth has lagged behind its neighbors, Guatemala and Nicaragua. Honduras, which has long been an economic underperformer, surpassed El Salvador’s GDP last year for the first time in more than 30 years.
Mauricio Choussy, former president of the Reserve Bank.
The former official considers, therefore, that the economy is the government’s Achilles heel, in a country that is mired in a very high debt. Hence, bitcoin has been used as one of the ways to obtain resourcesalso managing to obtain a loan of USD 1.4 billion from the International Monetary Fund (IMF).
This is a scenario where Bukele raises his stakes, offering incentives to attract investments, with bitcoiners being one of his main target audiences. The offer of express nationality and tax exemption has been some of the tactics to attract people from the ecosystem.
The plan has been to make the country attractive to investors and to all those eager to do Bitcoin tourism. A bet that so far has given good results, as recognized by the Banco Santander team.
In this way, it is possible to foresee that the favorable regulation of bitcoin, which Trump may implement in the United States, generate unusual and unequal competition with El Salvador.
This same effect was already seen under Joe Biden’s government, but in reverse, since the Democrat’s regulatory onslaught meant that, for many companies in the sector, El Salvador became in an attractive destination.
It has been a negative time in which many US companies looked for options in countries with a better regulatory context, and where El Salvador came into view along with places like Hong Kong and Singapore.
“We are open to business for all those who wish to build the future in cryptocurrencies,” the team at the National Bitcoin Office has repeatedly said, which in addition to friendly laws offers facilities in terms of procedures. A fact that even companies like Google, which opened its offices in the country, have recognized through local media.
It is feared that if the US implements regulations that also promote the use of Bitcoin, El Salvador could face obstacles in its goal of integrating cryptocurrency into its economy.
Increased scrutiny for Bitcoin activities
Another effect in El Salvador, derived from the regulation of Bitcoin in one of the largest economies in the world, has to do greater scrutiny.
New laws in the US could increase scrutiny over BTC-related activities in El Salvador. A situation that the Central American country has already experienced since declaring BTC as legal tender.
It is worth remembering, in this sense, that the US Congress proposed a law in 2023 to «monitor El Salvador’s actions with bitcoin», which at that time were seen as a threat.
Although Bukele was quick to question the proposalthis surveillance is likely to be repeated, even in the Trump administration, if the US feels its plans are threatened; especially since the dollar is also legal tender in El Salvador.
Positive repercussions are also expected
In the midst of everything, there are also those who consider that the effects They can be positive for El Salvador. If the US adopts a more favorable stance towards bitcoin, the global legitimacy and acceptance of the digital currency increases. El Salvador would benefit from strengthening the cryptocurrency ecosystem in general.
It is believed, therefore, that a more regulated and transparent market could increase investor confidence, which in turn could strengthen the Salvadoran economy.
If the US establishes a clear regulatory framework, more businesses and consumers could adopt bitcoin, which in turn could boost its use in El Salvador. This would, in turn, impact low adoption that has characterized the Salvadoran process.
Additionally, greater global adoption would also facilitate El Salvador’s integration into the global cryptocurrency-based economy.
Additionally – beyond competition – favorable regulatory environment in the US. could attract more investments to El Salvadorbased on greater stability of the cryptocurrency market.
The result would point to the development of infrastructure and services related to Bitcoin in the Central American nation. This is how the VanEck team evaluates it in a report that focuses on on the issue of remittances.
The firm’s analysts think that if the US facilitates the use of cryptocurrencies for remittances, Salvadorans living in the United States could send money to their families faster and cheaper.
As El Salvador remains heavily dependent on remittances ($8 billion annually, or 24% of GDP), primarily from the United States, maintaining a strong bilateral relationship is essential.
VanEck.
In this way, it is hoped that Trump’s presidency will offer the possibility of a reset. «With Trump’s well-documented support for Bitcoin, El Salvador could emerge as a strategic partner in the United States’ efforts to build regional alliances,» the experts add, predicting very good relations between the two leaders.
It is expected that the innovations and support for Bitcoin that Bukele has so far promoted alone, and with the opposition of many, will now move forward with American support.
Given the above, it can be concluded that the Bitcoin-friendly regulation that the US is likely to apply. has the potential to impact El Salvador both positively and negatively. It all depends on how the regulatory landscape and the cryptocurrency market evolve internationally.