Salvadoran Bitcoin Dream Fails to Take Off Five Years On

Five years have passed since El Salvador made Bitcoin an official currency, but it has yet to take off as expected. The move initially generated interest from tourists and expat tech entrepreneurs who traveled to experience it, with a promised $30 in Bitcoin for those who downloaded the government's Chivo Wallet app driving a brief surge of domestic use.

However, businesses were required to accept Bitcoin for a time but never fully adopted the technology. Foreign crypto-enthusiasts have soured on the Salvadoran Bitcoin dream, and its use remains similar to the rest of the world - almost nobody uses it for day-to-day transactions, amounting to less than one percent of the remittance market.

The worst hypothetical consequences, such as MS-13 or the Sinaloa Cartel laundering money through Bitcoin ATMs in San Salvador, never materialized. However, there have been a few crazy stories of criminal operations attempting schemes along those lines.

The IMF's problem with El Salvador's Bitcoin experiment was not about doubts on cryptocurrency but how Bukele implemented it - there's a serious lack of transparency about where the funds for the Bitcoin came from and how the cryptocurrency was stored, transferred, and accounted for. The Chivo Wallet has been privatized, but its new ownership is unclear.