El Salvador's Bitcoin Journey: A Success Story or a Missed Opportunity?

A Resounding Success?

President Nayib Bukele recently praised El Salvador’s bold experiment with bitcoin, describing it as a “resounding success” that has brought “nothing but benefits” to the country. In an interview with TIME, he reflected on the journey since 2021, when El Salvador became the first country to adopt bitcoin as legal tender.

Embracing Bitcoin

Bukele highlighted how citizens can now engage in bitcoin transactions at various establishments, from McDonald’s to hotels, thereby experimenting with this innovative technology. He stated, “The positive outcomes outweigh the negative,” as he assessed the impact three years into the initiative.

Adoption Challenges

However, not all is rosy. Bukele expressed disappointment over the limited adoption of bitcoin among Salvadorans, noting that while some use it, the overall rate has declined—from 21% in 2022 to just 12% in the past year, according to a recent study. He acknowledged that many citizens have not embraced bitcoin as anticipated.

Voluntary Participation

Bukele emphasized the voluntary nature of bitcoin usage, stating, “Those who have not used it have no obligation to use it.” He affirmed that the government has never forced anyone to adopt bitcoin, but rather presented it as an option for those willing to take advantage of its potential benefits.

Economic Perception

Despite some citizens using bitcoin for everyday purchases, a staggering less than 1% believe it has positively impacted El Salvador's economy. The lack of trust and understanding of the technology, alongside ongoing infrastructure challenges, has relegated bitcoin to a mere curiosity for many.

Bukele's Optimism

Despite these challenges, Bukele remains a steadfast bitcoin maximalist, asserting that the issues are “relatively minor.” He continues to highlight the benefits, such as enhanced branding, increased investments, and a boost in tourism as positive outcomes of embracing bitcoin.