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On September 7, 2021, the Central American country of El Salvador became the first country in the world to recognize Bitcoin as 'legal tender', a historic and bold step. This decision by President Nayib Bukele sparked a huge debate in the global economy.

1. Why was Bitcoin adopted? (Purpose)

President Bukele made this decision with three main goals in mind. Financial inclusion: About 70% of El Salvador's people do not have a bank account. The main goal was to bring them into the digital economy through Bitcoin wallets. Reducing remittance costs: About 20-25% of the country's GDP comes from remittances sent by expatriates. Bitcoin is reducing the huge fees that are paid to send money through traditional means. Attracting foreign investment: Attracting technology companies and investors by presenting itself as a crypto-friendly country.

2. Implementation Process

The government launched an official digital wallet and gave every citizen a $30 Bitcoin equivalent as a sign-up bonus. Hundreds of Bitcoin ATMs were installed across the country so that people could easily convert Bitcoin to dollars and dollars to Bitcoin. By law, every business with the technical capability was required to accept Bitcoin as payment (although most transactions are still in dollars).

3. Results of Bitcoin Adoption (Pros)

The number of tourists to El Salvador has increased significantly since the adoption. In particular, "Bitcoin Beach" (El Zonte) has become a major destination for crypto enthusiasts around the world. The country's Bitcoin reserves are now in large profits as the price of Bitcoin reached record highs around 2024-25. With these profits, the government has built new schools and a state-of-the-art veterinary hospital. Many crypto companies have moved their offices to El Salvador, which has created employment opportunities.

4. Challenges and Criticism (Cons)

When the price of Bitcoin fell sharply during the 2022 bear market, the IMF and the World Bank warned the country that its economy could collapse. Bitcoin use is still very limited outside the cities and among the elderly. Most people still prefer the US dollar for everyday purchases. Critics say the government needs to make the Bitcoin trading process more transparent.

5. Current status and future plans

El Salvador is now moving towards bigger plans. It plans to build a tax-free city using volcanic geothermal energy to mine Bitcoin. The country has begun the process of borrowing from international markets by issuing bonds backed by Bitcoin. Those who invest in Bitcoin or USDT in the country are being offered fast-track citizenship.

Conclusion

El Salvador’s experiment has had mixed results. It has shown that a country can make Bitcoin part of its national reserve if it wants to, but it cannot change the payment habits of ordinary people overnight. Seeing El Salvador’s success, other countries, such as Paraguay or the Central African Republic, are now considering following suit. Today's discussion concludes here. I hope you've found it interesting. Please share your thoughts on today's topic. Prayers for everyone. May everyone be well. Amen.

Me behind the camera & keyboard

I’ve always loved sharing my passions with you — from crypto and movie reviews to photography, storytelling, and blogging. Now, continuing that creative journey, I’ve stepped into a brand-new world — Gaming ! 🎮 | 🎥 On my YouTube channel Bokhtiar The Survivor — I’m consistently working to bring you the raw thrill of my gaming experiences — the emotions, the excitement, and those unforgettable moments that make every game feel alive.