El Salvador has reversed its 2021 Bitcoin legal tender initiative, prompted by IMF pressure. The law, aimed at enhancing financial inclusion, struggled with public skepticism and low adoption rates. Although tourism peaked, overall Bitcoin usage remained negligible, leading to the decision to amend the legislation. Businesses can now opt to refuse Bitcoin payments, and government transactions will revert to traditional currencies.
El Salvador has ended its experiment with Bitcoin as legal tender, initially adopted in 2021. This shift occurred under pressure from the International Monetary Fund (IMF), which urged the country to reconsider its approach. Key issues included low public trust in Bitcoin, with only 15% of the population supporting its use, and significant challenges with the Chivo wallet and general cryptocurrency education.
In September 2021, El Salvador became the first nation to accept Bitcoin as legal tender, mandating merchants to accept it alongside the U.S. dollar. Despite a government-backed Chivo wallet designed to facilitate transactions, many citizens remained unbanked, leading to reluctance in adopting Bitcoin due to its volatility. By 2024, public interest in using Bitcoin had declined, with only 1.3% of remittances conducted in cryptocurrency.
The conclusion of El Salvador’s Bitcoin experiment reflects significant public skepticism, operational challenges with the Chivo wallet, and economic pressures resulting from the IMF’s recommendations. While some tourist interest has been noted, overall adoption remained low, and the country will now shift towards more traditional financial practices, allowing businesses to choose whether to accept Bitcoin.
Original Source: crypto.news
