El Salvador ends the bitcoin legal giving experience – What is the mistake that happened?

El Salvador, the first country to adopt Bitcoin as a legal tendency in 2021, recently reflected its decision after pressure from the International Monetary Fund. What led to this change, and what are the results of the encryption experience for about four years?

The strange condition of El Salvador

Law 2021 in Salvador Bitcoin Made (BTC) Legal giving, and this means that it is not only legal but mandatory for transactions. Traders were asked to accept bitcoin, and the government began collecting payments such as taxes and fees in Bitcoin.

To facilitate this, the country launched the Chivo portfolio, a government -backed mobile application designed to help El Salvadorians deal with Bitcoin. The application allowed users to send, receive and store bitcoin, and even offer a $ 30 incentive in Bitcoin for those who downloaded it.

However, the law did not affect the state of the US dollar, which was the official currency of Salvador from 2001 to 2021. This means that Salvadorians who did not want to use bitcoin still could the US dollar for all transactions. Opinion polls from 2021 Show Only 15 % of the population trust in bitcoin, and 70 % of the respondents are adopting.

Despite the campaign of President Nayb Media and Public Relations, the law failed to persuade many Salvadors of its value.

While the international encryption community praised the Salvaduri Law, the country’s residents protest The law in the streets, and many of them in the financial world, criticized the defects of the legislation.

One of the main issues was that many merchants across the country were not equipped to accept bitcoin, and that the law did not address this gap.

Moreover, a large part of the population lacks bank accounts, and many companies are still only acceptable cash payments. Many merchants were also reluctant to accept bitcoin due to its fluctuations, fearing that its volatile value would lead to losses.

What are the results of the bitcoin al -Salvador experience?

The period of nearly four years during which the legal giving in El Salvador has mostly negative results, although there are a few positives that must be observed.

On the positive side, Bitcoin 2021 dependence helped expose more people cryptocurrency. The resulting result was leap In tourism. The advertisement of Bitcoin’s adoption of international interest, which led to a 20 % increase in tourist expatriates in 2024 compared to 2023, as growth also grows in previous years.

However, the broader effect was largely negative. Bitcoin failed to act as a hedge against inflation in El Salvador. Issues such as its severe fluctuations and technical difficulties are often cited with Chivo’s portfolio as reasons for the audience’s reluctance to use Bitcoin.

In addition, multiple piracy Accidents The Chivo wallet included more confidence in the cryptocurrency, which leads to its limited use.

Bitcoin law has also decreased to significantly improve financial inclusion. In 2021, approximately 70 % of Sillenvadorians were not accompanied, and a larger percentage was not used bitcoin.

In fact, most people in the country have greatly ignored the digital currency. By 2024, a a report From the Central American group indicated that 92 % of Salvadorians did not use bitcoin for transactions.

While Bitcoin was intended to facilitate the cross -border payments, it had no significant impact in this regard. In 2023, it was only 1.3 % of transfers to make Using bitcoin. Survey 2022 also open 86 % of local companies did not have Bitcoin transactions, and 91.7 % of the respondents said that the adoption of bitcoin did not affect them. Only 3.6 % of a sales improvement.

Timing was one of the main defects in Bitcoin’s accreditation strategy. The law was enacted in 2021, after a year after a large coding gathering, feeding half of Bitcoin.

Historically, the markets follow the bull with blockage, and the law was passed before the start of the winter, the encryption of another. The acute bitcoin crash in 2022 was only served to dissuade Salvadorians from using the currency.

How did the El Salvador Bitcoin experience ended?

Since 2022, the International Monetary Fund has urged El Salvador to amend Bitcoin Law. On January 30, 2025, Al -Salvadori conference took a measure Review Law against a loan of $ 1.4 billion from the International Monetary Fund.

One of the main condition for loan securing is to remove the bitcoin legal bid in the country. Loan deal It states that “the participation of the public sector in economic activities, transactions and purchases related to bitcoin will be limited.”

While reports indicate that Bitcoin will remain legal for trade between Salvadorians, they will no longer be accepted for taxes or other government payments, and companies will have the right to refuse bitcoin payments.

The condition of all companies for Bitcoin accepted blatant criticism due to BTC fluctuations and the limited audience understanding digital currencies. New legislative reform as well Headlines These concerns by giving companies the option to choose whether or not the Bitcoin will be accepted

However, the full range of these restrictions has not been fully identified, and more details are expected soon.

The International Monetary Fund loan will be disbursed for 40 months, which means that these restrictions will be enforced over three years, which may lead to a long -term decrease in the role of bitcoin in the country.

Despite the shift in politics to secure the International Monetary Fund loan, the El Salvador government appears to maintain its pro -profit position. On February 4, Bitcoin Al Salvador I mentioned Buy a total of 12 BTC through two separate transactions.

The first acquisition included 11 BTC, which was purchased for about $ 1.1 million, at an average rate of 101,816 dollars per bitcoin. The second purchase added 1 BTC at a price of 99,114 dollars, and just hours later.

These recent acquisitions reach the country’s total Bitcoin reserves in the country to 6,068 BTC, which are valued at more than $ 592 million at the time of writing this report. El Salvador continued to accumulate bitcoin steadily, after adding 60 BTC during the past month alone.