El Salvador

In September 2021, El Salvador made history by becoming the first nation to adopt Bitcoin as legal tender. President Nayib Bukele championed this initiative, aiming to modernize the economy, attract foreign investment, and provide financial services to the unbanked population. The government introduced the Chivo wallet, offering a $30 incentive to encourage adoption. However, the move faced domestic and international criticism due to Bitcoin's volatility and concerns over financial stability.

Despite initial enthusiasm, Bitcoin adoption among Salvadorans remained low. Surveys indicated that by 2024, only 7.5% of the population used Bitcoin for transactions, with the majority preferring traditional payment methods. In response to these challenges and to secure a $1.4 billion loan from the International Monetary Fund (IMF), the Salvadoran government, in January 2025, revoked Bitcoin's status as legal tender, making its use voluntary and removing the mandatory acceptance requirement for businesses. (elpais.com)

Recent Developments

• Bitcoin Mining: Since 2021, the country has mined nearly 474 bitcoins using geothermal energy from the Tecapa volcano, contributing to the national treasury. (reuters.com)

• Tourism Impact: Following the initial adoption of Bitcoin, El Salvador experienced a 30% increase in tourism, attributed to global interest in the country's pioneering cryptocurrency policies. (virtuse.com)

• Infrastructure Projects: The government is constructing the Airport of the Pacific in Conchagua, intended to serve the planned Bitcoin City and boost regional connectivity. (en.wikipedia.org)

While El Salvador's Bitcoin experiment has faced challenges, the government continues to integrate Bitcoin into its economic strategy, focusing on mining and infrastructure development to harness potential benefits.