Beautiful Virgin Islands

Friday, Jul 25, 2025

Scepticism grows in El Salvador over pioneering Bitcoin gamble

Scepticism grows in El Salvador over pioneering Bitcoin gamble

Litha María de Los Angeles slaps two cheese-filled pupusas – the El Salvadoran cornmeal flatbread – on the griddle. With a camera click on the QR code, she receives her payment: four hundred-thousandths of a Bitcoin. Then, as the rain pelts the corrugated iron roof and a gust of wind lifts the blue plastic table cloths, the power cuts out.
A tumultuous few weeks awaits El Salvador as it prepares to become the first country to adopt Bitcoin, the world’s most popular decentralised digital currency, as legal tender on 7 September. With that deadline looming, a host of challenges – technological, financial and criminal – threaten to sink the plan of the president, Nayib Bukele, to ride the Central American economy out of its current choppy waters on the back of a cryptocurrency wave.

El Zonte, a surf town with about 3,000 residents and a black sand, pebble-strewn beach, is an unlikely location for a global financial revolution. But since 2018 the town’s Bitcoin Beach project has been a petri dish for cryptocurrency adoption. Backed by Californian donors, the project gave $50 (£36) in Bitcoin to each local family, encouraged the cryptocurrency’s adoption by local vendors, and paid dozens of social projects with it, from lifeguarding to rubbish collecting.

“Now you can buy groceries, pupusas, or pay for your internet with Bitcoin,” says José Roman Martínez, 30, one of the founders of Bitcoin Beach. “For many people, this is the first time they’ve received a digital payment.”

Interest in the project from crypto-savvy tourists has given a new lease of life to El Zonte and led to a real-estate boom in the town, according to Martínez. “When I was a kid, the only thing Salvadorans wanted to do was to cross the border and head to the US. Now the kids here are dreaming of better things.”

Can a circular-economy experiment backed by a handful of foreign crypto-evangelists replicate itself at the national level? Salvadorans have had no say in the matter so far, but they are about to find out.

Bukele announced his plan to elevate Bitcoin to legal tender in June (a month before his 40th birthday) with his customary millennial elan: via video link to a Miami cryptocurrency conference. Since then, like Elon Musk with a presidential mandate, he has prolifically pumped out Bitcoin memes and promises on his Twitter account.

Just five days after the announcement, lawmakers passed the bill by a large majority. A national digital wallet called Chivo – local slang for “cool” – is in development with $30 worth of Bitcoin uploaded to each one as an initial balance. Transactions in Bitcoin will be exempt from capital gains tax, and foreigners investing three Bitcoins in the country (about $120,000) will be granted residency.

In August a research note by Bank of America enthused about the new law’s ability to reduce the cost of cross-border transactions (remittances account for 20% of El Salvador’s GDP), increase digital penetration in a country where 70% of people still do not use banks, and attract foreign investment as a first mover in cryptocurrency adoption.

Since then, however, the verdict from international financial organisations – and El Salvadorans themselves – has turned decidedly pessimistic.

“The law was adopted extremely quickly, without a technical study or a public debate,” says Ricardo Castañeda, a local economist. “I don’t think the president has fully understood the implications of the law, its potential to cause serious macroeconomic problems and convert the country into a haven for money laundering.”
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
×