El Salvador made headlines in 2021 when millennial President Nayib Bukele announced the country would take the unprecedented step of adopting Bitcoin as legal tender. Back then, the move sparked criticism across the spectrum and raised concerns from the International Monetary Fund, which as a key creditor strongly opposed the idea due to its speculative nature.
But with cryptocurrency now emerging from the depths of the “crypto winter” and trading near all-time highs, Mr. Bukele’s ambitious gamble seems to be turning around.
Less than three years ago, El Salvador passed critical legislation to adopt Bitcoin as legal tender along with the U.S. dollar. It was certainly a global first, and it represented one of Mr. Bukele’s largest bets during his first term, looking to encourage the use of crypto as a means of payments and as a cheaper alternative for international remittances, which many Salvadorans rely heavily on.
But while the use of Bitcoin today is nowhere near as widespread as Mr. Bukele may have desired, the current spike in prices has certainly brought favorable implications for the “Buy a Bitcoin a day” strategy he announced in late 2022.
With Bitcoin now trading at around USD 70,000 apiece, Salvadoran holdings of the cryptocurrency represent over 1 percent of its GDP, and more than 10 percent of its total foreign reserves stock.
The Salvadorian National Bitcoin Office, a department created to execute and communicate Bitcoin strategy, has reported holdings...
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