Bitcoin in El Salvador: What This Means for Real Estate & Foreign Investment Opportunities
As El Salvador becomes the first country in the world to officially classify Bitcoin as legal tender, more and more questions continue to arise on how this approval will affect real estate and foreign investment opportunities in the country.
In this blog, we’ll do a deep dive into how and where Bitcoin can be used for real estate transactions and how the growing popularity of blockchain-based assets in emerging countries worldwide will make foreign investment in El Salvador more attainable than ever before.
What Does the Bitcoin Law Mean for El Salvador?
Under the new Bitcoin Law that went into effect on June 9, 2021, businesses in El Salvador must accept the cryptocurrency as legal tender for goods and services, including tax contributions.
With 70% of people in El Salvador lacking access to traditional financial services and the country itself being heavily reliant on the two million Salvadorans who live outside the country who send up to $4 billion each year to help support the economy, President Nayib Bikele believes that “It will bring financial inclusion, investment, tourism, innovation and economic development for our country.”
That means, the local community will have more purchasing power as individuals. Plus, the new law is poised to attract global entrepreneurs, financiers and general cryptocurrency supporters that have the disposable income and means to boost the overall real estate economy in El Salvador.
How to Purchase Real Estate with Bitcoin
Block-chain based real estate has been taking the industry by storm over the past few years as buyers, sellers and investors continue to learn about the many positive opportunities there are in the digital real estate world.
Taking what the traditional MLS system offers and catapulting it to entirely new heights, the blockchain can offer a new level of transparency and security through smart contracts and leger abilities, delivering unrivaled efficiency and results for real estate transactions in El Salvador whether buyer, renting, leasing or financing.
In addition, introducing Bitcoin as legal tender also gives El Salvador the opportunity to “tokenize” its real estate market which, in short, means that those looking to purchase or invest in real estate can create digital shares on a blockchain, allowing multiple parties to invest in one singular asset.
For example, a 2,000 square-foot home can be divided into several shares and held by several people – each with their own digitized security tokens and digital key to access their own shares. This translates into endless, lucrative opportunities for investors.
So Why El Zonte, aka “Bitcoin Beach”?
Although some may believe the decision to approve Bitcoin in El Salvador to be an overnight decision by congress, it was actually inspired by a small surf town called El Zonte, otherwise known as “Bitcoin Beach.”
According to the Bitcoin Beach website, “Bitcoin Beach is a movement to make sure the true potential of Bitcoin is realized, and that those who have been excluded from the banking system are the primary beneficiaries. Backed by the donation of an anonymous early Bitcoin adopter, Bitcoin Beach has made it its mission to prove that Bitcoin could have the biggest impact on the lives of those that society often ignores.”
So, why has the destination become a hot spot for foreign investors and buyers in El Salvador?
Not only is the destination heralded for its beautiful beaches, great surfing, amazing food and vibrant local culture, there are ample opportunities for beach-front properties for sale that some people only dream of. Plus, foreigners (whether investing or just touring) who invest three or more bitcoins in the country will be granted permanent residency.
As Bitcoin and real estate in El Salvador continue to make waves across the world, it’s important to understand what comes with purchasing, leasing or financing real estate within the country, whether you’re a local or a foreign investor. That’s why, it’s so important to partner with an expert in the industry that can guide you through the purchasing decisions that work best for your needs.
Complete with an extensive list of properties that can suit each and every lifestyle, our small but dedicated team is equipped with agents, lawyers, architects and developers who are ready and available to guide you through the entire process — from the initial investment to the conceptualization of your property.
What’re you waiting for? E-mail us today to schedule a private tour!