El Salvador Ditches Bitcoin as Legal Tender: A Failed Economic Gamble

2025-02-04
El Salvador Ditches Bitcoin as Legal Tender: A Failed Economic Gamble

El Salvador, the first country to adopt Bitcoin as legal tender in 2021, has reversed course. President Nayib Bukele's economic gamble has failed, with Bitcoin never gaining widespread adoption among Salvadorans and the planned Bitcoin City remaining unbuilt. A revised Bitcoin Law removes the definition of Bitcoin as 'currency,' though it remains 'legal tender,' effectively allowing refusal of Bitcoin payments. This reform was a key condition for El Salvador to receive a $1.4 billion loan from the International Monetary Fund (IMF). While the government claims it will continue holding Bitcoin reserves, the move is criticized for its lack of transparency and highlights flawed economic decision-making by the Bukele administration.