The news is official: Google has opened a new office in El Salvador.
The company has offices all over the world, but had none in El Salvador yet.
What is being questioned is whether this choice has anything to do with the fact that in El Salvador Bitcoin is legal tender.
Summary
The reasons for Google’s entry into El Salvador
In the official statement, Google explains that the goal is to contribute to supporting the digital transformation of the country, including the modernization of its government services and economic development.
However, El Salvador is only a small country in Central America, with less than six and a half million inhabitants, and apparently of non-strategic geopolitical importance.
Actually, it is a country that has been suffering for decades, with a GDP per capita lower than that of Mongolia, Algeria or Sri Lanka.
Moreover, it is literally surrounded by three larger countries, Guatemala, Honduras, and Nicaragua, and is close to Mexico, which is the most important country in all of Central America.
It is worth noting that the only official Google office in Central America was actually in Mexico City, with six other offices in South America, so the one in El Salvador seems like an anomalous choice.
The fact is that in August of last year, the company signed a collaboration agreement with the government of El Salvador, to support the country in modernizing its processes and the services provided to its citizens.
Google in the Central American country is working specifically on initiatives in the areas of digital government, healthcare, and education, and these initiatives are already underway.
Google: The possibilities of a new opening in El Salvador
In addition to the official reasons, however, several other hypotheses are circulating.
The first reason is that, quite simply, the government of El Salvador is focusing heavily on modernization, with the goal of becoming the main innovative hub in Central America, especially in the digital field.
However, although this seems to be a more than plausible motivation, it is not clear in the same way why Google has agreed to help the country in this goal.
Indeed, it is still a country with high crime rates, although these are sharply declining, and with an apparently marginal role in the political chessboard of that area.
So there must be something else behind this choice of the American giant.
Another hypothesis is that Google, already active for some time with various services in the crypto sector, wants to physically establish itself in the country precisely because it is trying to become the crypto hub of Latin America.
The point is that it seems that El Salvador is actually making it in this sense, also thanks to the help and support of Tether.
Furthermore, it is hard to imagine that Google is completely ignoring this factor, or that they are even unaware of it, so it is evident that at least some questions in this regard are being asked.
Google and cryptocurrencies
With the landing of Bitcoin spot ETFs on traditional US stock exchanges, the crypto sector has fully entered the global and traditional financial markets.
Google, through its holding Alphabet, is an absolute protagonist in the financial markets, as it is the fifth listed company in the stock market with the largest market capitalization in the world, outperforming even Amazon, Meta (formerly Facebook) or Warren Buffett’s Berkshire Hathaway from this point of view.
But perhaps the most important thing is Google’s commitment within the crypto sector itself, with several services that, for now, do not involve financial markets.
Already five years ago they began integrating data from the Ethereum blockchain into Google Cloud’s BigQuery using Chainlink oracles.
In 2022 it was then discovered that the company had invested 1.5 billion in blockchain companies, marking the real and active presence of the US giant in the crypto sector.
Although it cannot yet be said that Google is a true player in the crypto sector, it is difficult to imagine that it will not become one, sooner or later.
Innovation
The key factor in this story seems to be innovation.
In the official statement, Google specifies that innovation and technology have helped millions of people around the world, but it must be the coordinated action of governments, the private sector, and civil society to translate these benefits into economic growth and stability, for the benefit of all communities and people.
In this perspective, in addition to the new headquarters, Google.org (the philanthropic arm of Google) will provide a donation of $200,000 to civil society organizations in the region to provide training on digital skills to local entrepreneurs in order to help support the growth of local businesses.
The press release also adds that, according to a study by AlphaBeta funded by Google, digital technologies such as cloud computing and artificial intelligence could create potential opportunities for around $3.4 trillion annually in the main emerging economies of Latin America, Eastern Europe, Africa, and the Middle East.
Their collaboration with the government of El Salvador would be a testimony of this potential, and the choice of El Salvador as a reference point for Central America, in addition to Mexico, hardly has nothing to do with the country’s intention to become a crypto hub and for technological innovation.
