#World

El Salvador’s Bitcoin Experiment Ends: What It Means for Crypto Policy.

El Salvador was the first country to adopt Bitcoin as legal tender, inspiring crypto enthusiasts worldwide. But three years later, parliament has repealed the law. The reasons behind this reversal—and its implications for Switzerland’s own Bitcoin debate—are worth examining.

Ambitious visions were abundant. El Salvador’s President Nayib Bukele promised his people financial freedom through Bitcoin. He envisioned a Bitcoin City, where crypto firms from around the world would establish themselves and mine digital currency.

The government even announced the world’s first Bitcoin sovereign bond. Bukele was heavily invested in Bitcoin’s success: According to the «NZZ» (paywalled article), he allocated $200 million in taxpayer money to the initiative—a staggering amount for a country on the brink of default.

Parliament Reverses the Decision

El Salvador was the first country in the world to declare Bitcoin an official currency in 2021—despite opposition from the International Monetary Fund (IMF). The move turned the nation into a showcase for Bitcoin proponents. Even in Switzerland, some crypto advocates frequently pointed to El Salvador as a pioneering project.

However, the country’s parliament has now pulled the plug, repealing the law. Bitcoin is no longer official legal tender.

Notably, the decision came just one day before a major international Bitcoin conference in San Salvador at the end of January.