While Bitcoin has surpassed $100,000 since Donald Trump’s victory in the last election, this marks the end of cryptocurrency as legal tender in El Salvador. The international body is providing the Central American country with $1.4 billion in financing for its public debt, which is more than 85 percent of its GDP in 2024.
Legal tender is no longer Bitcoin.
El Salvador has a monetary agreement with the IMF. “LeBitcoin”Established in September 2021. The text makes the country the first state to officially recognize cryptocurrencies as legal tender alongside the US dollar.
But then what are the changes in this text? While the original law forced economic actors to accept bitcoin as a means of payment, this obligation turns into an optional option. Businesses in the country have the choice of whether or not to accept bitcoin at checkout.
Other aspects of “LeBitcoin” Downside was also revised. Taxes are now paid only in dollars, whereas earlier it was possible in Bitcoin. The government of El Salvador is also planning a gradual reduction of its official digital wallet. Cryptocurrency transactions are subject to limitations.
The population of El Salvador does not use Bitcoin.
Given the doom and gloom of Bitcoin adoption as legal tender, this decision is not surprising. According to a recent survey, 92% of El Salvador’s population does not use cryptocurrency for daily transactions. However, many tourists and investors were attracted by the move.
In early October, the IMF recommended limiting its scope. “LeBitcoin” With the strengthening of the regulatory framework and a range of public sector exposure to cryptocurrency.
President Nayib Bukele was known for his passionate love for Bitcoin, promising to revive the country economically by implementing it as legal tender. Unfortunately, three years after the adoption of “LeBitcoin”it’s an end game for a move that hasn’t caught on with the population.
