Bitcoin took the internet by storm in 2021 when El Salvador – the smallest country in South America – announced it will make the cryptocurrency a legal tender.
The plan was first made public during the 2021 Bitcoin Conference that was held in Miami through a video of El Salvador President Nayib Bukele that shared the nation’s plan to adopt a bill that will make Bitcoin legal tender.
Bukele said the move was to make it easier for its people living abroad to send remittances to their relatives back home.
On June 9, 2021, the Bitcoin Law was adopted by the country’s Legislative Assembly as 62 out of the 84 deputies voted in favor of it.
The government then announced they were setting $150 million to be utilized as fund to support the approved legal measure. Officials even said they would give $30 in BTC to individuals who will sign up for an electronic wallet dubbed as “Chivo.”
But, more than a year following the crypto’s historic adoption in the country, things didn’t turn out the way El Salvador government expected them to.
Bitcoin Adoption Failed in Every Front
According to findings by a research study conducted by the University of Central America (UCA), around 77% of El Salvadorans believe the adoption of Bitcoin as legal tender in their country was a massive failure.
Moreover, 75.6% of the people revealed they haven’t used cryptocurrencies this year. Such a development is surprising considering the administration of Bukele exerted efforts in popularizing the digital asset class.
Bitcoin is accepted in El Salvador as a means of payment for products and services. Photo from BBC/Reuters.
The idea that the government is using public funds to accumulate BTC also did not sit well with the citizens, as 77% of them said such action should stop immediately.
As to Bitcoin’s supposed benefit of making it easier to send remittances, a September 2022 report from the Salvadoran Central Bank revealed only 2% of remittances involved digital currencies.
El Salvador: Defiant And Confident
Bukele picked the best time to venture into Bitcoin last year as the crypto ultimately reached an all-time high of around $69,000 last November.
But with the volatile nature of the crypto space, the El Salvador government experienced severe losses as BTC price plunged and is currently struggling to make another bull run.
At press time, according to tracking from Coingecko, Bitcoin is trading at $19,173, down by more than 70% from its all-time high.
Even with calls to reverse the highly controversial Bitcoin Law, Bukele remains upbeat as their strategy is yet to take off.
With that, instead of focusing on the negative reception the law has gotten from the masses, the government is dedicating its time and resources into realizing their goal of making the country a global crypto hub.
BTC total market cap at $366 billion on the daily chart | Featured image from Nayib Bukele Twitter, Chart: TradingView.com