In September 2021, El Salvador adopted Bitcoin as its second legally-recognized national currency alongside the U.S. dollar. It is the first nation to adopt the “Bitcoin Standard,” serving as a testing ground for other countries looking to adopt the digital currency as legal tender.
Jonathan Martin is a graduate of Stanford University, Georgetown University, and a student at The Wharton School, currently on leave immersing himself in the world of Bitcoin in El Salvador.
President Nayib Bukele, the 42-year-old Salvadoran Leader in his first term in office, has a vision to completely revolutionize the economy, starting with the integration of Bitcoin. Businesses must accept bitcoin for payment by law, and the government has purchased 2,381 BTC to date (worth ~$70 million as of this writing). It also launched its own bitcoin wallet – called the Chivo Wallet – and announced plans to deploy 1,500 bitcoin ATMs to help spur adoption.
Bitcoin for everyday people
El Salvador and a flood of bitcoin expats view bitcoin as the future of money, but how the average Salvadoran feels about the digital commodity is a different question – particularly in its use as a medium of exchange in everyday commerce. If bitcoin is to become the next global reserve currency, the average non-bitcoiner must believe in its intrinsic value, even if they do not understand the underlying system that backs it.
Read more: David Z. Morris – 1 Year of Bitcoin in El Salvador: The Bad, the Good and the Ugly
From my time living in the country so far, the potential for bitcoin to succeed as a currency is evident, but whether the average Salvadoran will embrace it is still yet to be determined.
Most Western bitcoin investors have a low-time preference for money (i.e., they are buying bitcoin to hold for years or decades) and believe it will continue to go up in value. However, to the average Salvadoran worker, living hand-to-mouth without robust savings, do the decentralized benefits and future potential of bitcoin present any real incremental value to them vs. using U.S. dollars?
Just a few years ago, El Salvador was one of the most dangerous countries in the world. Today, Bukele’s uncompromising security policies have dramatically reduced crime, and citizens now feel safe to start businesses, go to dinner with their…
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