Bitcoin in El Salvador - A Revolution That Never Took Off

One of the biggest obstacles was that many Salvadorans did not trust Bitcoin. The population was unfamiliar with cryptocurrency, and many preferred using cash or traditional banking methods. Despite government incentives, adoption remained low.

Technical and Infrastructure Issues

The government introduced the Chivo Wallet, but it was plagued with bugs, security issues, and transaction failures. Many businesses struggled with Bitcoin transactions due to slow processing times and lack of technical knowledge.

Volatility and Financial Risks

Bitcoin’s high price fluctuations made it impractical for daily transactions. Businesses and individuals feared losing money if Bitcoin’s value dropped suddenly after a sale. This discouraged many from using it as a reliable payment method.

Lack of Business Incentives

Many businesses chose to avoid Bitcoin because they had to convert it to U.S. dollars immediately to avoid financial risk. The extra steps and conversion fees made it more complicated than simply accepting cash or card payments.

International Pressure and Economic Impact

The move faced criticism from global financial institutions, including the IMF and World Bank. Concerns over money laundering, financial instability, and debt risks led to warnings against Bitcoin adoption, further discouraging widespread use.

Conclusion

While Salvador’s government pushed for Bitcoin adoption, public distrust, technical issues, price volatility, and economic concerns made it difficult for legal payments to become mainstream. Today, Bitcoin remains an option but is rarely used for everyday transactions.