Web search giant Google is expanding its Cloud operations into the only nation to fully legalize Bitcoin as tender—El Salvador. With America still cracking down on crypto and other nations embracing it, industry observers have drawn their own conclusions.
This week, the global tech behemoth announced that Google Cloud and the government of El Salvador have entered into a 7-year strategic partnership, pending legislative approval.
Google Ventures Into El Salvador
On August 30, Swan Managing Director Steven Lubka came to the conclusion that El Salvador’s Bitcoin adoption was one of the factors.
“Google establishing operations in El Salvador is entirely due to their adoption of Bitcoin and I am not going to pretend otherwise.”
Tether and VanEck advisor Gabor Gurbacs said:
“This would have not been possible without Bitcoin and the technology and investment focus it brought to the region.”
On August 31, President Nayib Bukele shared a video on the agreement and the benefits his country would get from partnering with the tech giant.
According to the announcement, Google Cloud will establish a legal entity and office in El Salvador.
Google Cloud elaborated:
“We will open an office and bring digital infrastructure to El Salvador – with cloud tech at the center of the country’s modernization in areas like govt services, healthcare, and education.”
Furthermore, the partnership focuses on three areas, including digital government. Google Cloud will help digitize government processes using Distributed Cloud services.
Google Cloud AI will assist doctors with real-time information for healthcare, and a unified Education Data Platform will be implemented.
El Salvador sees this as positioning itself as a tech and innovation hub in Central America, which started with the adoption of Bitcoin. Nayib Bukele commented:
“El Salvador is moving forward. We believe technology and foreign investment are key for development. We are quickly becoming a hub for innovation.”
In 2022, Google announced an investment of $1.2 billion in Latin America and the Caribbean over the next five years. Meanwhile, Strike, Binance, and Tether have all signaled moves to El Salvador.
Bitcoin Treasury Status
El Salvador holds 2,954 BTC valued at roughly $80 million at current prices. However, the investments which began in September 2021 are down around 33%.
Moreover, the dollar cost average of those BTC purchases is around $41,000, according to the Nayib Tracker.
In November 2022, Nayib Bukele announced that going forward, they would purchase 1 BTC daily.
Meanwhile, BTC prices have continued to retreat following this week’s Grayscale court victory. The asset had dropped another 0.8% on the day in a fall to $27,190 at the time of writing depleting gains from the short-lived pump.
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