Beautiful Virgin Islands

Monday, Jun 30, 2025

As El Salvador Makes Cryptocurrency Legal Tender is It the Beginning of the End for Dollar Hegemony?

As El Salvador Makes Cryptocurrency Legal Tender is It the Beginning of the End for Dollar Hegemony?

The idea of cryptocurrency was first conceived in the 1980s but it was not until 2009 that the first open-sourced software, Bitcoin, was released. There are now dozens of blockchains but they have until not been regarded as legal tender.

El Salvador will make history on Tuesday, 7 September, when it becomes the first country in the world where cryptocurrency is officially legal tender and can be used to buy a house or a car or even to pay your taxes.

Supporters of cryptocurrency hope it could mark the beginning of the end of the "dollar hegemony."

In 2019, the dollar was responsible for 88 percent of global trade but cryptocurrencies such as Bitcoin could offer an alternative, especially for smaller countries who are prone to economic bullying.

A poll by the Central American University, published on Thursday 2 September, found two-thirds of Salvadoreans were opposed to allowing cryptocurrencies to be legal tender, although it appeared to be driven by ignorance.


​Of 1,281 people surveyed nine out of 10 people did not have a clear understanding of how Bitcoin worked and 70 percent thought the government should repeal the law, passed in June, allowing it to be legal tender.

El Salvador’s President Nayib Bukele, who proposed the idea, believes cryptocurrency can help boost jobs and economic development by making the country less reliant on US dollars.

Unemployment is around seven percent in El Salvador but the majority of the population live on low wages and grinding poverty, as well as high levels of crime, have persuaded tens of thousands to head north to the “promised land” of the United States.

The sun rises as asylum-seeking migrants' families from Honduras and El Salvador walk towards the border wall after crossing the Rio Grande river into the United States from Mexico on a raft, in Penitas, Texas, U.S., March 26, 2021


There are 1.5 million Salvadoreans in the US, compared to six million in El Salvador itself, and another 40,000 live in Honduras, Guatemala or Mexico, often having abandoned the migrant journey north.

Seven out of 10 people in El Salvador do not have bank accounts and President Bukele believes cryptocurrency will make it easier for migrants in the US to send remittances back to their family without having to pay the charges demanded by banks and firms like Western Union.

Remittances - around US$4 billion a year - makes up around a fifth of the country's GDP.


Mr Bukele, a former businessman of Palestinian origin, has portrayed the cryptocurrency move as a way for El Salvador to dig itself out of its economic mire.

"This will improve lives and the future of millions," Mr Bukele told a Bitcoin conference in Florida in June.

President Nayib Bukele holds his ballots as he prepares to vote in local and legislative elections, at a polling station in San Salvador, El Salvador, Sunday, Feb. 28, 2021


But the UCA survey found most Salvadoreans think foreign investors and the country’s wealthy elite will be the only beneficiaries.

"The dean of UCA, Andreu Oliva, said: "What we can see in this survey, in addition to this broad rejection of the implementation of Bitcoin as legal tender, is that for the first time we found a significant disagreement between the population and decisions being made by the Legislative Assembly and the president.There is a lot of concern about the possible negative effects of using Bitcoin."


But if cryptocurrency works in El Salvador, and if it boosts the economy and draws in inward investment, then it could well be copied by other impoverished states like Honduras, Haiti, Zimbabwe, Liberia and Sierra Leone.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
Russian Shadow Payments via Cryptocurrency Reach $9 Billion
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Airlines Evaluate Flight Cancellations Amid Escalating US-Iran Tensions
Starmer Invites Innovators to Join Government Talent Scheme
UK Economy’s Strong Opening Quarter Shows Signs of Cooling
Harrods Seeks Court Order to Secure Al Fayed Estate for Victims
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
×