El Salvador was the first nation in the world in and now is also the first to abandon it. The Salvadoran Parliament – controlled by the ruling party – has just approved, with a low profile, a reform to the Bitcoin Law that leaves its use as an official currency, so it is at the discretion of the users. The reform occurs after almost, that who put as a condition “mitigate the risks of Bitcoin” in exchange for approving 1.4 million dollars that President Nayib Bukele urgently needs. The Salvadoran government had as a limit the last day of January to reform the law if it intended to receive the money.
The deputies modified six articles and repealed three of the 16 that had the law, in force for just over three years. From now on, Bitcoin will not be considered a “currency”; Its acceptance goes from mandatory to voluntary and will not serve to pay taxes. The modifications were re -entrusted by the ruling party. Despite being very active in social networks, President Bukele has said nothing about it.
Bitcoin was approved as legal tender in El Salvador in September 2021 in the midst of a rejection of 71% of the population, according to surveys. Despite this, the government invested more than 200 million dollars to install the scaffolding for its operation, the creation of a digital wallet and the installation of ATMs throughout the country.
The law forced all public businesses and institutions to receive Bitcoin unless they did not have the technology necessary to perform transactions. To stimulate its use, the Government gave a $ 30 bonus to each person who install the official Wallet Chivo wallet on their phone. A year later, only 21% of the population had ever used it, according to Ludop, one of the most prestigious pollsted houses in El Salvador. By 2024 only 8.1% of the population said they used it.
Bukele sold the implementation of Bitcoin as one of his greatest successes to the world and promised the Salvadoran population “economic prosperity and financial freedom.” In that same year, El Salvador became called “El País del Bitcoin”, but by the end of 2022 91.7% of the population believed that its economy remained the same or worse, according to surveys. In mid -2024, a study by the Central Reserve Bank revealed that in El Salvador there were 55,000 poor more than the previous year.
Opacity
All information related to Bitcoin in El Salvador was declared under reserve since the law was implemented. During the first years, the only official information was what President Bukele published in his personal account of X. The ruler came to ensure that he made Bitcoin’s purchases from his personal phone even when he was in the bathroom.
Recently, the Government published a website called Bitcoin Office in which some data can barely be seen. According to the site, for this Tuesday the Salvadoran government had a reserve of 6,049.18 bitcoins, equivalent to 637.3 million dollars. The site does not reveal, for example, if the government has sold bitcoins or what has been done with that gain or who manages it.
Amid the official silence, they have revealed acts of corruption in the implementation of Bitcoin, such as the duplication or falsification of users to collect the $ 30 dollars, the breach of international laws against money laundering and that allowed the theft of $ 840,000 .
Stacy Herbert, director of Bitcoin Office, said on December 19 that the Government will eliminate or sell the official Wallet Chivo wallet. However, he said that El Salvador will continue to buy Bitcoin “possibly at an accelerated pace” and that he will continue to promote laws to attract investment and create educational programs to teach the population the use of cryptoactive.
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