El Salvador’s Bitcoin experiment turns 5: ‘It was for us, not them’

It’s been five years since El Salvador became the first country to adopt Bitcoin as legal tender.

President Nayib Bukele announced the plan at the Bitcoin conference in Miami on June 5, 2021, to the jubilant cries and applause of the Bitcoin community, who hailed the tiny Central American nation as living proof that BTC could be sovereign money.

Bukele sold the experiment as a way to bank the unbanked, slash remittance costs, and attract investment to the impoverished nation.

But five years on, who did the experiment benefit, and what did it actually achieve?

Dr. Tobias Boos, a senior scientist at the University of Vienna who leads a research project examining the political economy of Bitcoin in El Salvador, tells Magazine:

“There is little doubt that the project was a failure if we take seriously the reasons Bukele gave for its adoption. Foreign direct investment in this sector didn’t increase, it did not effectively bank the unbanked, and it is not widely used for remittances.”

Yet El Salvador’s Bitcoin bet undeniably changed the conversation around the world’s number-one cryptocurrency, and turned nation-state adoption from a theoretical possibility into a living, breathing reality. Whether it succeeded or failed depends on what you think El Salvador was trying to achieve.