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Six months in, El Salvador’s bitcoin gamble is crumbling

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Six months in, El Salvador’s bitcoin gamble is crumbling

Rest of World,

5 min read
3 take-aways
Audio & text

What's inside?

El Salvador’s experiment with bitcoin is off to an inauspicious start.


Editorial Rating

8

Qualities

  • Eye Opening
  • Hot Topic
  • Engaging

Recommendation

El Salvador’s president Nayib Bukele is going all in on bitcoin, but his country is not. Much of the population lacks bank accounts and internet connections, according to investigative journalists Anna-Cat Brigida and Leo Schwartz in this revealing report, and high volatility, error-plagued technology and an infrastructure ill-suited to such a venture have only confounded the nation’s push to make bitcoin an official currency. This real-world experiment in sovereign cryptocurrency may have gained the president global renown, but Brigida and Schwartz note that his country’s growing debt crisis may help explain his crypto fervor.

Summary

El Salvador grabbed the world’s attention with its decision to make bitcoin the nation’s legal tender.

El Salvador’s Bitcoin Law of 2021 made the country the first to adopt a digital token as a legal currency and to mandate its acceptance for payments. President Nayib Bukele set forth lofty aspirations to digitize the nation’s economy, free it from US dollar dependence, increase inward investment and reduce fees on remittances, which amount to one-fifth of the nation’s GDP.

The push to adopt the digital currency got its start in 2019 in the town of El Zonte, on Bitcoin Beach. Crypto-enthusiast locals sought to introduce a digital...

About the Authors

Anna-Cat Brigida is a freelance journalist located in Central America. Based in Mexico City, Leo Schwartz is a reporter with Rest of World.


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