In September 2021, El Salvador became the first country to adopt bitcoin as legal tender. He remains the only one to this day.

In the small seaside resort of El Zonte, popular with tourists and surfers, Maria expresses her satisfaction at having invested in bitcoin, legal tender since 2021 in El Salvador which has just reached record levels. The surge “has been great and I am very happy,” this trader who runs a mini-market in the village of 3,000 inhabitants, about sixty kilometers west of the capital San Salvador, told AFP.

She says she invested $2,200 in virtual currency four years ago and now has a nest egg of $19,000. Bitcoin hit an all-time high of $73,797 last Thursday, before falling again. At the end of 2022, the cryptocurrency was trading below $17,000.

Bitcoin has brought me “better economic stability”, assures Maria Aguirre, 53, recounting that she was able to buy a washing machine, a stove and a refrigerator thanks to her investments in cryptocurrency. On the facade of his business called “Tienda Mary” a poster reads: “bitcoin accepted”. In El Zonte, but also in the surrounding villages, virtual currency is used to make daily payments. The picturesque resort town was nicknamed “Bitcoin Beach” for being the first place in the country to mass adopt cryptocurrency.

“Bitcoin Beach” is also the name of an app used in the region to make transactions. Sitting on a chair in her small restaurant, Rosalina Franco claims to serve many customers who pay in bitcoins every day. Most of the time, they are foreign tourists.

“What I receive in bitcoins I keep, I don’t spend it, it’s savings,” explains this 70-year-old woman.

“People’s distrust”

In 2021, El Salvador became the first country in the world to introduce bitcoin as legal tender, at the initiative of President Nayib Bukele, who has also rubbed his hands in recent days at the surge in the currency. Last week, he announced that the country would set aside, offline, thousands of bitcoins worth $407 million.

The 42-year-old young head of state introduced bitcoin in an attempt to revitalize his dollarized economy dependent on remittances from abroad, despite warnings from the IMF and the World Bank about the extreme volatility of the cryptocurrency. . But this is far from having convinced the entire population: according to a survey by the University of Central America (UCA), 88% of Salvadorans did not use it in their transactions in 2023.

“What is clear is that people continue to use more traditional methods to send (funds) and this has a lot to do with people’s distrust of the volatility of cryptocurrencies”, underlines with from AFP independent economist César Villalona.

Blanca Castillo runs a store selling artificial flowers and natural juices in El Zonte. If the 25-year-old trader is also delighted with the “profits” made thanks to bitcoin, she recognizes the risks involved. “When we see that the value of the currency is going to fall, we feel that we are going to have losses (…) we must constantly keep an eye to see how it will evolve,” she notes.


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