When the sun rose on 7 September 2021 in the Central American nation of El Salvador, something remarkable was underway: the country became the very first in the world to give legal-tender status to Bitcoin alongside the U.S. dollar.
It was a bold move. One that promised to leap-frog barriers, redefine how people transact, and give a voice to those without bank accounts. At the same time, it was an experiment of such novelty that global financial watchers held their breath.
Over time, as the country’s government piled into digital-currency purchases, installed Bitcoin ATMs, made the “Chivo” wallet available and evoked visions of “Bitcoin City” at the foot of a volcano, two very human questions emerged: Has the gamble paid off? And for whom?
Here is the story of that jump, the ripples it produced and the lessons it quietly left behind.
The Heavy Lift Of Change
In a small surf-town called El Zonte, local youths traded waves and dreams, and back in 2020 found themselves part of an informal bitcoin experiment. The visitor-donor who sent bitcoins to that town gave rise to what came to be known as “Bitcoin Beach” — and this micro-economy would feature in the narrative of a national leap.
President Nayib Bukele and his Cabinet envisaged a broader transformation: 70 % of Salvadorans lacked full access to formal banking. The hope was that Bitcoin would help them open doors — to savings, to remittances, to a new kind of participation.
One teller-moment: a street-vendor slapping pupusas onto a griddle, scanning a QR code at her table and accepting a tiny fraction of a bitcoin — an image of inclusion and modernity.
Yet the first days were uneasy. On the very morning the law took effect, the Chivo wallet system crashed—server capacity overwhelmed. Mr Bukele, known for his social-media flair, took to Twitter to ask for patience.
Economists outside and inside the country warned: bitcoin’s volatility, the country’s sizeable debt, its obligations to international lenders — all posed serious risks.
Within months, the government announced it had acquired additional bitcoin — for instance 150 coins at a price averaging about US$48,670 each.
By June 2022, following a steep decline in global cryptocurrency markets, the value of El Salvador’s publicly reported bitcoin reserves had dropped by more than half. Analysts noted that while the nation’s economic difficulties were not caused by bitcoin itself, the cryptocurrency’s volatility had further intensified the country’s financial strain.
What Happened On The Ground
Despite the fanfare, adoption by everyday Salvadorans proved limited. A poll in late 2021 found 68 % disagreed with the decision to adopt bitcoin. By 2022 only around 14 % of businesses had processed any bitcoin payments.
And when first-time chivo-wallet users were incentivised with a US$30 bitcoin-bonus, some 61 % stopped using the app after spending the bonus — and most of the remaining usage was still in dollars rather than bitcoin.
Still: the story is not one of total defeat. The initiative did raise Salvadoran visibility globally; it drew tech-savvy tourists; it pushed infrastructure; it offered hope to a segment of the unbanked who were curious and engaged.
In March 2024, Mr Bukele announced the country had achieved roughly a 50 % profit on its bitcoin holdings. And in the face of that positive headline, Premier financial-press portraits still cautioned that unmeasured costs existed: the effort of education, trust-building, and the underlying economy’s structural issues.
A Pivot, And A Quiet Hope
Toward the end of 2024 and the beginning of 2025, El Salvador entered a new phase of its financial journey when the International Monetary Fund approved a US$1.4 billion support package. The agreement required the government to scale back its nationwide bitcoin initiative, making participation optional and reducing the nation’s overall exposure to the cryptocurrency.
In January 2025 the Legislative Assembly swiftly approved amendments: businesses would no longer be required to accept bitcoin; government tax-payments in bitcoin would be phased out. The grand vision of a “bitcoin-nation” paused, but the journey pivoted.
Crucially, this need not read as a failure, but rather a realignment. The hopes of technological empowerment and inclusion still whisper in the data: more Salvadorans hold digital wallets; tourism interest in crypto remains alive; the discourse of financial sovereignty endures. Even if the scale of use remains modest, the idea that innovation can live in a small country remains alive.
The Human Take-Away
What of the teacher in San Salvador who downloaded the Chivo app but seldom uses it? Or the small-shop owner who scanned the QR code once and reverted to dollars? Their experience is quietly instructive: systems change doesn’t move at the pace of headlines. The tech can be sparkling, but trust, education, utility take time.
In El Zonte, the young surfer who accepted bitcoin as payment still surfs; his peers still dream of something bigger than the flat-economy they grew up in. The bitcoin policy gave them a mirror: you belong in the global financial world, not outside it.
For the country, the experiment showed that taking risks matters — and that recalibrating when needed is wise. Financial inclusion is not a button you press one day and instantly flip. It is a pathway, with detours and learnings.
Where Things Go From Here
El Salvador has opened doors which few nations have walked through. The memory of being first to adopt bitcoin as legal tender will remain part of its story. Its challenge now is to translate that story into daily impact: savings for low-income households, easier remittances, stability rather than friction.
Globally, other countries tracking this story will see caution and creativity: boldness does not preclude realism; innovation must meet infrastructure, trust and pedagogy.
Conclusion
The gamble of making bitcoin legal tender in El Salvador was not a guaranteed win — but in many ways it was not a loss either. It was a collective gesture of possibility. The outcome is uneven, still unfolding, but there is hope. For every sceptic who warned the risk would destabilise the nation, there is the small business in San Salvador that accepted its first crypto transaction, the remittance-receiver who toggled between bitcoin and dollar, the country that dared to try.
And so, as El Salvador pivots—scaling back some grand aspects, doubling down on others—the deeply human story remains: of a nation reaching for inclusion, experimenting with change, and refusing to let its people sit forever on the sidelines of finance. In that, there is a quiet, enduring hope.
Sources:
The Guardian
Reuters
Marketplace
