London Daily

Focus on the big picture.
Thursday, Oct 02, 2025

Scepticism grows in El Salvador over pioneering Bitcoin gamble

Scepticism grows in El Salvador over pioneering Bitcoin gamble

Litha María de Los Angeles slaps two cheese-filled pupusas – the El Salvadoran cornmeal flatbread – on the griddle. With a camera click on the QR code, she receives her payment: four hundred-thousandths of a Bitcoin. Then, as the rain pelts the corrugated iron roof and a gust of wind lifts the blue plastic table cloths, the power cuts out.
A tumultuous few weeks awaits El Salvador as it prepares to become the first country to adopt Bitcoin, the world’s most popular decentralised digital currency, as legal tender on 7 September. With that deadline looming, a host of challenges – technological, financial and criminal – threaten to sink the plan of the president, Nayib Bukele, to ride the Central American economy out of its current choppy waters on the back of a cryptocurrency wave.

El Zonte, a surf town with about 3,000 residents and a black sand, pebble-strewn beach, is an unlikely location for a global financial revolution. But since 2018 the town’s Bitcoin Beach project has been a petri dish for cryptocurrency adoption. Backed by Californian donors, the project gave $50 (£36) in Bitcoin to each local family, encouraged the cryptocurrency’s adoption by local vendors, and paid dozens of social projects with it, from lifeguarding to rubbish collecting.

“Now you can buy groceries, pupusas, or pay for your internet with Bitcoin,” says José Roman Martínez, 30, one of the founders of Bitcoin Beach. “For many people, this is the first time they’ve received a digital payment.”

Interest in the project from crypto-savvy tourists has given a new lease of life to El Zonte and led to a real-estate boom in the town, according to Martínez. “When I was a kid, the only thing Salvadorans wanted to do was to cross the border and head to the US. Now the kids here are dreaming of better things.”

Can a circular-economy experiment backed by a handful of foreign crypto-evangelists replicate itself at the national level? Salvadorans have had no say in the matter so far, but they are about to find out.

Bukele announced his plan to elevate Bitcoin to legal tender in June (a month before his 40th birthday) with his customary millennial elan: via video link to a Miami cryptocurrency conference. Since then, like Elon Musk with a presidential mandate, he has prolifically pumped out Bitcoin memes and promises on his Twitter account.

Just five days after the announcement, lawmakers passed the bill by a large majority. A national digital wallet called Chivo – local slang for “cool” – is in development with $30 worth of Bitcoin uploaded to each one as an initial balance. Transactions in Bitcoin will be exempt from capital gains tax, and foreigners investing three Bitcoins in the country (about $120,000) will be granted residency.

In August a research note by Bank of America enthused about the new law’s ability to reduce the cost of cross-border transactions (remittances account for 20% of El Salvador’s GDP), increase digital penetration in a country where 70% of people still do not use banks, and attract foreign investment as a first mover in cryptocurrency adoption.

Since then, however, the verdict from international financial organisations – and El Salvadorans themselves – has turned decidedly pessimistic.

“The law was adopted extremely quickly, without a technical study or a public debate,” says Ricardo Castañeda, a local economist. “I don’t think the president has fully understood the implications of the law, its potential to cause serious macroeconomic problems and convert the country into a haven for money laundering.”
Comments

Oh ya 4 year ago
Oh once you so called digital money is in your so called digital bank the government can force you too do anything they want or they will shut off your funds. You have less and less freedom every year protect what you have before you lose it. I can not believe how stupid people are to sign up for slavery

Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×