Ambition, like Bitcoin itself, can be volatile. When El Salvador’s President Nayib Bukele made Bitcoin legal tender in September 2021, he promised a financial revolution. A crypto utopia powered by volcano energy. A “Bitcoin City” where digital dreams would flourish.
Fast forward to 2025, and reality has bitten hard. The grand experiment has fizzled. A whopping 92% of Salvadorans don’t use Bitcoin, according to recent surveys. Not exactly a ringing endorsement.
The Chivo wallet app that was supposed to transform the economy? Plagued with technical glitches and security concerns from day one. Initial surveys revealed that 90% of Salvadorans lacked basic understanding of Bitcoin before its adoption, setting the stage for inevitable failure. Remember all those businesses that were supposed to embrace Bitcoin? Yeah, most avoided it like yesterday’s ceviche. Too volatile. Too complicated.
The promised remittance revolution never materialized either. El Salvador’s digital wallet remittances accounted for a mere $7.22 million in December 2024, less than 1% of total remittances. Then came the international smackdown. The IMF wasn’t having it. Credit agencies downgraded El Salvador’s debt faster than you can say “blockchain.” Concerns about money laundering and terrorism financing weren’t helping Bukele’s case.
By December 2024, the crypto dream was officially on life support. El Salvador struck a $1.4 billion deal with the IMF that fundamentally gutted Bukele’s Bitcoin policy. Talk about a U-turn. Bitcoin is no longer mandatory for businesses. Taxes? Pay them in good old US dollars, please.
The Fidebitcoin trust fund must be liquidated by July 2025. Ouch. The government still holds 6,101 Bitcoin worth about $534 million. Many experts suggested Bukele should have considered fiat-backed stablecoins instead of volatile Bitcoin for a smoother transition. They’re even buying one Bitcoin daily since November 2022. Stubborn, right?
But the writing’s on the wall. Chivo wallet is facing shutdown. Bitcoin lost its “currency” designation. Public sector Bitcoin purchases? Prohibited.
Despite the setbacks, Bukele claims he’s still committed to his crypto vision. Sure, and I’m committed to becoming an Olympic gymnast tomorrow.
The experiment’s failure has global implications. Other nations watching El Salvador’s Bitcoin adventure are likely rethinking their crypto ambitions. Sometimes, innovation means learning what doesn’t work. And boy, did El Salvador learn the hard way.
