While many countries flirted with cryptocurrency adoption, El Salvador dove in headfirst. In September 2021, President Bukele made Bitcoin legal tender, handed out $30 sign-up bonuses through the Chivo wallet, and declared a new era of financial freedom. Spoiler alert: things didn’t quite go as planned.
The numbers tell a sobering story. Bitcoin usage in El Salvador has plummeted from 24.4% in 2022 to a measly 7.5% in 2024. Turns out, giving people free money doesn’t guarantee long-term adoption – only 20% of Chivo wallet downloaders stuck around after spending their bonus. Initial surveys revealed that 90% of Salvadorans didn’t understand Bitcoin when it was introduced. The initiative started small with the Bitcoin Beach project in 2019, testing cryptocurrency adoption in local communities. So much for digital revolution.
Despite initial enthusiasm and free Bitcoin bonuses, El Salvador’s crypto experiment fizzled as usage dropped dramatically and most users abandoned their digital wallets.
But it hasn’t been all doom and gloom. The government’s Bitcoin investment actually turned profitable in 2023, with holdings reaching 6,024 BTC worth $569 million by 2025. Some businesses, particularly in crypto-friendly El Zonte, reported 30% increases from Bitcoin-toting tourists. Some merchants have begun accepting stablecoins alongside Bitcoin to minimize volatility risks. Not too shabby for a controversial experiment.
The international community wasn’t exactly thrilled. The World Bank said “thanks, but no thanks” to implementation assistance, Moody’s downgraded the country’s credit rating, and the IMF repeatedly urged El Salvador to ditch Bitcoin altogether. By 2024, the government finally agreed to limit its Bitcoin involvement to secure an IMF deal.
Reality hit hard on the ground. Limited internet access, lack of digital literacy, and Bitcoin’s notorious volatility created significant hurdles. The mandatory acceptance requirement for businesses? Scrapped in 2024. Remittances via Bitcoin? A mere 1.9% of total transfers in 2021-2022.
Yet El Salvador’s crypto experiment has left an indelible mark on global finance. Bitcoin circular economies are emerging beyond El Zonte, and other developing nations are watching closely. Whether it’s ultimately viewed as a visionary move or a cautionary tale, one thing’s certain: El Salvador’s bold leap into cryptocurrency territory has forced the world to confront the possibilities – and limitations – of digital currency adoption in the real world.
