The post El Salvador Ends Bitcoin Legal Tender Experiment—What Went Wrong? appeared on BitcoinEthereumNews.com.

El Salvador, the first country to adopt Bitcoin as legal tender in 2021, recently reversed its decision after pressure from the IMF. What led to this change, and what were the outcomes of its nearly four-year crypto experiment? The curious case of El Salvador The 2021 law in El Salvador made Bitcoin (BTC) legal tender, meaning it became not just legal but mandatory for transactions. Merchants were required to accept Bitcoin, and the government started collecting payments such as taxes and fees in Bitcoin. To facilitate this, the country launched the Chivo wallet, a government-backed mobile app designed to help Salvadorans transact with Bitcoin. The app allowed users to send, receive, and store Bitcoin, and even offered an incentive of $30 in Bitcoin for those who downloaded it. However, the law didn’t affect the status of the U.S. dollar, which had been the official currency of El Salvador from 2001 to 2021. This meant Salvadorans who didn’t want to use Bitcoin could still use USD for all transactions. Polls from 2021 showed that only 15% of the population trusted Bitcoin, and 70% of respondents opposed its adoption. Despite President Nayib Bukele’s media campaign and public relations efforts, the law failed to convince many Salvadorans of its value. Protesters in San Salvador set alight a Bitcoin ATM which had just been installed by the government. The protest was called to oppose the El Savador government’s decision to make Bitcoin legal tender. pic.twitter.com/PyW2AWbkiw — Radical Graffiti (@GraffitiRadical) September 19, 2021 While the international crypto community lauded the El Salvadoran law, the residents of the country protested the law on the streets, and many in the financial world criticized the legislation’s flaws.  One key issue was that many merchants across the country were not equipped to accept Bitcoin, and the law did not…

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Filed under: News - @ February 6, 2025 6:14 am