In El Salvador, Bitcoin’s Retreat Left Valuable Lessons
Making the crypto asset legal tender was a worthy experiment, but financial innovation requires more state capacity and better regulations.
In September 2021, El Salvador became the first country to adopt Bitcoin as legal tender. At that time, President Nayib Bukele argued that the bold decision would promote financial inclusion, increase the efficiency of remittances, and boost private investments, particularly those tied to new technologies. However, the measure also sparked valid concerns about implementation and macroeconomic issues. After the experiment ended two months ago, many wondered what was left of the initiative and what would happen next. The change of heart for El Salvador’s government came from the...
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