Bitcoin between El Salvador and Texas?
The fact that El Salvador is now something of a “home” for Bitcoin was already widely understood, but that Texas also aspired to such a role was not entirely clear.
However, Texas still produces large amounts of fossil energy sources, so it may be interested in leveraging Bitcoin to monetize the excess energy produced, given the low production costs.
Indeed, it is no coincidence that, for example, some Bitcoin mining farms in Texas long ago started using waste gas to power their machines.
Bitcoin (BTC): The El Salvador Initiative in Texas
A couple of days ago, El Salvador’s ambassador to the United States, Milena Mayorgaannounced that she has a new ally, namely Texas, with whom they are discussing the possible opening of a second Bitcoin embassy and projects for trade and economic exchange.
El estado de Texas, nuestro new allyado.
En mi encuentro med Secretario Adjunto del Gobierno de Texas, Joe Esparza @TXsecofstateabordamos la apertura de la segunda Embajada #Bitcoin y de ampliar los proyectos de intercambios commerciales y económicos. 🇺🇸🤝🇸🇻 pic.twitter.com/NcmOjeadl6
— Milena Mayorga (@MilenaMayorga) 14 February 2023
Mayorga officially met with the Texas Deputy Secretary of State Joe Esparza and reported that by 2022 the total trade volume between El Salvador and Texas was more than $1.2 billion.
El Salvador is a small state compared to Texas: 21,000 km² against almost 700,000 km², and six and a half million inhabitants against 28.7 million. It is enough to mention that the urban area alone where Houston, i.e. the capital city of Texas, is located, has a whopping 5.8 million inhabitants.
In addition, Texas is also a real economic powerhouse, with a GDP that is not only the second absolute among all American states, but which alone turns out to be higher even than Russia, Canada or Italy.
So for El Salvador, it could be a very important ally, given that El Salvador’s annual GDP is only $32 billion, which is only 27 times the volume of trade relations with Texas.
However, it is still difficult at this point to imagine what role Bitcoin could realistically play in this relationship, and why Milena Mayorga called the one they want to open in Texas a “Bitcoin embassy.”
El Salvador’s previous Bitcoin Embassy
In fact, El Salvador has already established a Bitcoin embassy.
It did so in October 2022 in Lugano, Switzerland, namely at the Plan B Forum.
The world’s first #Bitcoin diplomat who represents the world’s first #Bitcoin nation in the first ever #bitcoin the embassy of 🇸🇻 in Lugano
@JosueLopezGal pic.twitter.com/jGsVZa09F9
— Stacy Herbert 🇸🇻🚀 (@stacyherbert) 28 October 2022
The ambassador is Josue Lopez, honorary consul for El Salvador in Switzerland.
Lopez says he represents both countries, and is bullish on both Lugano, El Salvador and Bitcoin.
Humbled and honored to be given this huge responsibility, to represent both countries that formed me and were part of my development. Bullish on Lugano 🇨🇭, Bullish on El Salvador 🇸🇻 and Bullish on #Bitcoin. pic.twitter.com/In9be9HMUI
— Josue Lopez 🇸🇻🇨🇭 (@JosueLopezGal) 28 October 2022
At this point, one might think that a similar initiative in Texas suggests that the US state is also thinking about doing something more with Bitcoin.
Lugano is trying to make BTC and USDT usable everywhere in the city, so much so in fact that it has by all accounts become a Bitcoin-friendly city. Maybe the state of Texas wants to be, too?
Texas and Bitcoin
In January, Texas presented a proposal to allow Bitcoin to be recognized as an authorized investment.
This would also allow institutions to invest in Bitcoin, and it seems to suggest that there is political interest in Texas aimed at making the state Bitcoin-friendly.
Then again, the US is by far the largest country in the world by Bitcoin hashrate, and Texas certainly won’t miss the opportunity to do business with mining.
To this must be added that the state has also been interested in technological innovation for some time now, which is evidenced, among other things, by Tesla’s Giga Factory which opened last year in Austin.
On the other hand, it is not yet clear what role Bitcoin will play in public finances and institutional investment in Texas, but it is more than likely that something from this point of view has already moved, but not officially yet.
What is certain is that if Texas decides to become Bitcoin friendly, this could have a strong positive impact on the BTC market, especially in the medium and long term.
Lugano is a very small city but important as a European crypto hub, while Texas is a real world power. While it is hard to imagine it competing with New York and Miami as a major US crypto hub, it is possible to imagine that it could become one.
Then again, El Salvador itself is trying to become a Latin American crypto hub, so an alliance between the two suggests that they may indeed be working on similar projects, in different territories.
It also cannot be ruled out that this could be a political move, since the current US government is Democratic and apparently skeptical of cryptocurrencies, while Texas is a Republican fiefdom and could play a key role in the upcoming presidential election.
Also, what is expected to be one of the leading Republican candidates for president in 2024 is Florida Republican Governor Ron DeSantis, a supporter of Bitcoin and governor of the state where there is now the largest crypto hub in the United States, Miami.
It is worth noting that since New York’s new Democratic mayor was elected in 2021, the city has yet to become a full-fledged crypto hub despite proclamations and aspirations to do so, while Miami has already become a full-fledged one with a Republican mayor. .
Therefore, it is possible that the political clash in the US between Democrats and Republicans also plays out over the role that institutions should play towards the crypto sector, and in this it certainly does not help at all that FTX co-founder and CEO Sam Bankman-Fried has mostly supported Democratic politicians.
