El Salvador's President Nayib Bukele (shown here at a news conference in May 2020) spearheaded efforts to make Bitcoin legal tender in his country. Yuri Cortez/AFP via Getty Images hide caption
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Yuri Cortez/AFP via Getty Images
El Salvador's President Nayib Bukele (shown here at a news conference in May 2020) spearheaded efforts to make Bitcoin legal tender in his country.
Yuri Cortez/AFP via Getty Images
El Salvador has become the first country in the world to make the cryptocurrency Bitcoin legal tender.
Advocates of the digital currency, including the country's president, Nayib Bukele, say the policy that took effect Tuesday morning was historic.
But the first few hours of Bitcoin's official status in El Salvador were marred by technological hiccups as the country opened its digital wallet app to residents and consumers for the first time.
Why El Salvador is choosing Bitcoin
Bukele previously suggested that legalizing Bitcoin would spur investment in the country and help the roughly 70% of Salvadorans who don't have access to "traditional financial services."
"We must break with the paradigms of the past," he said Monday in a statement translated from Spanish. "El Salvador has the right to advance toward the first world."
Bukele also has said that using Bitcoin would be an effective way to transfer the billions of dollars in remittances that Salvadorans living outside the country send back to their homeland each year, the Associated Press reported.
El Salvador's government holds 550 Bitcoin, Bukele said, which is equivalent to about $26 million.
The country's other currency is the U.S. dollar.
The rollout included success stories and tech hang-ups
Among the stories on social media Tuesday were those of people successfully using Bitcoin to pay for goods.
"Just walked into a McDonald's in San Salvador to see if I could pay for my breakfast with bitcoin, tbh fully expecting to be told no," Aaron van Wirdum said in a tweet that was retweeted by Bukele.
"But low and behold, they printed a ticket with QR that took me to a webpage with Lightning invoice, and now I'm enjoying my desayuno traditional!" he added.
Still, there were some minor hiccups during the official introduction of the new currency.
After the launch Tuesday morning, officials took down Chivo, El Salvador's virtual Bitcoin wallet, so they could attempt to increase the capacity of the image capture servers.
Opposition to Bitcoin ... and to Bukele
While much has been made across the world of El Salvador's historic economic move, excitement within the country may be much lower.
A recent poll by the Universidad Centroamericana José Simeón Cañas, a Jesuit college based in El Salvador, found that 67.9% of people disagreed with the decision to make Bitcoin legal tender. Many respondents said they didn't know how to use the cryptocurrency, the poll found.
Critics of the experiment — including some of Bukele's political opponents — wore T-shirts to parliament on Tuesday to express their opposition to the new Bitcoin law.
But it's not just the economy. Bukele's government is also facing pushback from the international community over a recent court decision that was widely seen as unconstitutional.
On Friday, judges appointed by El Salvador's parliament, which is dominated by Bukele's party, concluded that the president could run for a second term in 2024, according to CNN. Experts say that is barred by the country's constitution.
The U.S. Embassy in El Salvador said in a statement that the decision "undermines democracy" and "further erodes El Salvador's international image as a democratic and trustworthy partner in the region."
FAQs
El Salvador took a different path toward digital payments. In 2021, in order to promote financial inclusion and job creation and facilitate remittances, it became the first country to adopt Bitcoin as a legal tender.
Is El Salvador the first country to accept Bitcoin as legal tender? ›
In 2021, El Salvador became the first country to adopt Bitcoin as legal tender, mandating that businesses accept the leading cryptocurrency as a form of payment and rolling out a digital wallet called “Chivo,” incentivizing citizens to partake with a $30 sign-up bonus in Bitcoin.
Which country was the first to accept cryptocurrency? ›
El Salvador's Congress on June 9 approved President Bukele proposal to embrace the cryptocurrency, making El Salvador the first country in the world to adopt bitcoin as legal tender.
When did El Salvador start buying Bitcoin? ›
El Salvador became the first country to purchase bitcoin as a treasury asset in September 2021, when a single coin cost around $52,000.
Which country use Bitcoin as legal tender? ›
Only two countries in the world that believe Bitcoin to be a genuine legal tender. The first is El Salvador. The second is the Central African Republic. It adopted Bitcoin as a legal tender in the second quarter of 2022.
Why is El Salvador using Bitcoin? ›
El Salvador took a different path toward digital payments. In 2021, in order to promote financial inclusion and job creation and facilitate remittances, it became the first country to adopt Bitcoin as a legal tender.
How much is El Salvador Bitcoin worth? ›
El Salvador Says Its Bitcoin Holdings Are Now Worth $350 Million.
Is Bitcoin legal in the USA? ›
Despite its use for buying goods and services, there are still no uniform international laws that regulate Bitcoin. Many developed countries allow Bitcoin to be used, such as the U.S., Canada, and the U.K. In several countries, including China and Saudi Arabia, it is illegal to use Bitcoin.
How many bitcoins does El Salvador have? ›
El Salvador, the nation that made bitcoin legal tender in 2021, continues to up its bitcoin (BTC) holdings. The country's president, Nayib Bukele, said on Monday that the nation now owns 5,700 bitcoins versus mid-March's roughly 5,690.
Which country has banned cryptocurrency? ›
Among them, 9 countries and regions have implemented absolute bans, which completely prohibit the production, holding, trading and use of cryptocurrency. These countries and regions are: Algeria, Bangladesh, China, Egypt, Iraq, Morocco, Nepal, Qatar and Tunisia.
Concerns had grown that the government would default on this year's debt as President Nayib Bukele made a gamble on bitcoin, making El Salvador the first country to declare it legal tender. Zelaya called out the doubters in a tweet announcing that the 2023 bond had been paid off.
How much bitcoin does Elon Musk own? ›
revealed on Twitter that he owns only a tiny fraction of one bitcoin token. "I literally own zero cryptocurrency, apart from . 25 BTC that a friend sent me many years ago," Musk confessed. Using today's bitcoin price of about $10,000 a coin, that translates to $2,500.
Who owns bitcoin? ›
Bitcoin remains open-source, meaning that no one has the power to own or control it in its entirety. Its design is public and it is open for anyone to participate. Bitcoin was a response to the Great Financial Crisis, which showed that even the world's biggest banks can fail.
What was the first real world transaction using Bitcoin? ›
The first real-world Bitcoin transaction occurred on May 22, 2010, now celebrated by Bitcoin enthusiasts as Bitcoin Pizza Day. Laszlo Hanyecz spent 10,000 BTC to have two Papa John's pizzas delivered, valued at approximately $25. At Bitcoin's peak price, the two pizzas would have cost north of $689 million.
What is the El Salvador Bitcoin passport program? ›
El Salvador Freedom Visa Program
El Salvador also offers a residency visa with a pathway to citizenship for investment of $1 million into the economy through Bitcoin or USDT. The programme is available to the first one thousand investors.
