In September 2021, El Salvador made history by becoming the first country in the world to adopt Bitcoin as legal tender, a bold move led by President Nayib Bukele. Combining technological innovation with an unconventional economic vision, this experiment has captured global attention and is challenging traditional notions about money, financial sovereignty, and economic development. More than three years after its inception, El Salvador’s “Bitcoin experiment” is not only transforming the local economy, but could also be laying the groundwork for a profound change in the global economy.
The origin of a risky bet
El Salvador’s decision to adopt Bitcoin came from a mix of pragmatism and ambition. With an economy historically dependent on the US dollar since 2001 and a high percentage of the population unbanked (around 70%), the country faced significant structural challenges. Bukele saw in Bitcoin an opportunity to address these problems: reduce the costs of remittances (which account for more than 20% of GDP), include the unbanked in the financial system, and position El Salvador as a pioneer in cryptocurrency adoption.
The government launched the Chivo digital wallet, installed Bitcoin ATMs across the country, and gave $30 worth of BTC to each citizen to incentivize its use. It also forced businesses to accept Bitcoin as a form of payment, although many have opted to immediately convert it to dollars. What started as a local test soon became a case study observed by economists, governments, and cryptocurrency enthusiasts around the world.
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Mixed results on the local level
As of March 2025, the results of the experiment are a mosaic of successes and challenges. On the one hand, El Salvador has gained international visibility as a laboratory for financial innovation. The strategy has attracted crypto investors, tech tourists, and companies interested in exploring the possibilities of a Bitcoin economy. Projects like Bitcoin City, a proposed tax-free city powered by geothermal energy, symbolize Bukele’s ambition to turn the country into a global cryptocurrency hub.
Additionally, the government has built up a strategic Bitcoin reserve, with over 6,000 BTC in its possession according to the latest estimates. With the price of Bitcoin reaching record highs in recent years, this investment has generated significant gains on paper, surpassing $600 million in value by the end of 2024. Bukele has defended this strategy as a long-term bet, and his insistence on buying more Bitcoin during market downturns has paid off when the price has recovered.
However, mass adoption among Salvadorans remains limited. Studies show that while many downloaded the Chivo wallet incentivized by the initial bonus, everyday use of Bitcoin as a medium of exchange is low. Most prefer the dollar for daily transactions, citing Bitcoin’s volatility and lack of financial education as barriers. Added to this is criticism from organizations such as the International Monetary Fund (IMF), which has pressured the country to reduce its reliance on Bitcoin as part of negotiations for a $1.3 billion loan.
BUY BITCOINA global impact in the making
Beyond its borders, El Salvador’s experiment is influencing how the world perceives and adopts cryptocurrencies. Countries like the Central African Republic have attempted to follow in its footsteps, albeit with less success, while nations like Argentina and Panama have shown interest in learning from this experience. El Salvador’s venture has brought crucial debates to the table: can a decentralized cryptocurrency coexist with traditional fiat currencies? Is Bitcoin a viable tool for economic development in emerging countries?
The most significant impact could be in redefining global financial power. By adopting Bitcoin, El Salvador challenges the hegemony of the dollar and centralized banking systems, offering an alternative model for nations seeking economic autonomy. While Bitcoin’s volatility remains a hurdle, its growing institutional acceptance—evidenced by the approval of Bitcoin exchange-traded funds (ETFs) in the United States in 2024—suggests that the world could be moving toward greater integration of cryptocurrencies into national economies.
A sustainable model or a passing experiment?
The future of the Salvadoran experiment depends on several factors. The country’s economic stability, the education of its population and the evolution of the crypto market will all be decisive. Critics argue that the $375 million invested in the project could have been spent on more urgent needs, such as infrastructure or health, especially in a context of persistent poverty. However, defenders argue that the long-term benefits — such as attracting foreign investment and financial modernization — justify the risk.
As the clock ticks down, El Salvador finds itself at a crossroads. Its experiment with Bitcoin is not only changing its own economy, but is also sending ripples through the global financial system. Whether seen as a visionary success or a risky bet, one thing is clear: the small Central American country has put Bitcoin center stage on the world stage, and the result could redefine the future of money for generations to come.
