A report by Bidget earlier this year said El Salvador is experiencing a surge in tourism, coinciding with its adoption of Bitcoin as legal tender. According to a report by Santander, Spain’s largest bank, in 2024, the country welcomed 3.9 million visitors, a 22% increase from the previous year. The report highlights a rise in U.S. tourists, many of whom are drawn by El Salvador’s Bitcoin adoption, apart from reduced crime in the country.
El Salvador’s growth in tourism has surpassed that of neighboring countries like Costa Rica, Guatemala, and Panama, which average 3 million visitors annually.
Meanwhile, the significance of tourism in Bhutan cannot be overstated; it weaves its way into nearly every conversation, underscoring its crucial role in the nation’s prosperity. And in an era where innovation is key, Bhutan boldly ventured into uncharted territory, embracing the world of cryptocurrencies and establishing itself as a global player in the digital asset industry. While there are no words currently about the union of tourism and cryptocurrency in Bhutan, Crypto Tourism could become a reality for Bhutan, too.
Crypto Tourism is a type of tourism designed for cryptocurrency enthusiasts. It includes travel packages that can be paid for with digital currency or offer classes and lectures about cryptocurrency as part of the tour. It also refers to airlines, hotels, and other businesses that accept cryptocurrencies as payment.
Crypto Tourism gained momentum in 2017, captivating digital currency enthusiasts, and continued to grow until the pandemic halted global travel. Countries like New Zealand and the Bahamas embraced cryptocurrency to attract tourists.
From 2018 to 2019, tourism companies launched specialized programs for crypto enthusiasts, including cruises with activities tailored for cryptocurrency users. In Queensland, New Zealand, tourists could explore the Southern Great Barrier Reef using cryptocurrency. The Bahamas, Grenada, and Cyprus also welcomed crypto-paying visitors, with the Bahamas even launching its own digital currency, the Sand Dollar, in 2020. These experiences attracted both wealthy crypto enthusiasts and regular travelers, with some tours featuring cryptocurrency conferences and exhibitions.
A Chainalysis (offers cryptocurrency investigation and compliance solutions to global law enforcement agencies, regulators, and businesses as they work together to fight illicit cryptocurrency activity) study found that Bitcoin use in travel transactions rose by 13% from January to July 2020 compared to 2019. Other cryptocurrencies like Ethereum, Litecoin, and Ripple are also gaining popularity in the travel industry. Platforms such as CheapAir.com (an American online travel agency) and TravelbyBit now accept Bitcoin, Litecoin, and Ethereum.
Using digital currency for travel payments offers tourists a new, convenient way to pay for trips. It also allows crypto enthusiasts to learn more about investing. Cryptocurrencies reduce ATM fees, currency conversion costs, and theft risks, while offering privacy, security, and faster transactions. They also help businesses bypass traditional banking systems, speeding up payments and lowering costs.
Airlines, like Alternative Airlines, have started accepting cryptocurrency payments for flights. Cryptocurrencies automate slow payment processes like invoicing, improving efficiency and reducing operational costs. They offer a secure, quick payment option for both travelers and businesses without needing physical cash or banks.
Despite the benefits, concerns remain. The cryptocurrency market is still largely unregulated, and some crypto tours are seen as promotional tools for small investments. The Crypto Tourism market is also small, as most people don’t use digital currencies, limiting its appeal. There are other challenges, too.
Hotels and airlines need Cryptocurrency Wallet Setup. Hotels would need a digital wallet to receive, store, and manage various cryptocurrencies (like Bitcoin, Ethereum, etc).
Wallets can be hosted online (hot wallets) or stored offline for added security (cold wallets). Similar to hotels, airlines need to set up a secure digital wallet that can handle multiple cryptocurrencies.
There should be integration with payment gateway, where a hotel’s payment system must be integrated with a cryptocurrency payment gateway, such as BitPay, CoinGate, or CoinPayments, which facilitates crypto transactions and often provides conversion to fiat currency. Airlines must work with payment providers like BitPay, CoinGate, or specialized travel crypto platforms that allow passengers to pay with cryptocurrencies during the booking process.
Hotels need to ensure that accepting cryptocurrencies complies with local laws, including anti-money laundering (AML) and tax regulations. This may involve reporting cryptocurrency transactions to the government. Similarly, airlines must comply with international and national regulations, which could include licensing and regulatory approval for accepting digital currencies. They must also adhere to the rules of the countries they operate in.
There should be a clear cryptocurrency payment policy. Hotels need to define and communicate policies regarding which cryptocurrencies are accepted, how payments are processed, and whether or not any transaction fees will apply. They also need to explain how crypto payments are converted (if they choose to convert to fiat currency). Airlines must specify which cryptocurrencies are accepted, how exchange rates will be handled, and any additional fees for using crypto for booking flights.
Other requisites are security measures, payment processing systems, taxation and accounting, amongst others.
The biggest challenge remains the widespread lack of understanding and adoption of digital currencies. Hesitation from both businesses and travelers stems from concerns over stability, security, and limited knowledge. Legal complexities further complicate matters, with many countries lacking clear regulations for cryptocurrency use, creating barriers to adoption. The conversion of cryptocurrencies into traditional currency and the taxation of crypto transactions remain unresolved.
Governments must take the lead, fostering education on the benefits and risks of cryptocurrencies for tourism businesses, travelers, and the public. Clear laws and guidelines are essential to ensure safety, stability, and ease of adoption. Collaboration between policymakers and industry leaders is crucial to securing the cryptocurrency market and protecting it from fraud.
The tourism industry is ever-evolving, and the rise of digital currencies presents new opportunities to meet shifting consumer demands. While it may be early for Bhutan to embrace Crypto Tourism, the time to plan for the future is now, especially when such possibilities lie ahead.
Ugyen Tenzin from Thimphu
