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Briefing Document: Bitcoin Adoption in El Salvador - A Post-Mortem (2025)

Source: Translated transcript of "Bitcoin El Salvador Podcast 2025"

Introduction

This document summarizes the key discussion points from a podcast recorded in El Salvador in 2025, exploring the aftermath of Bitcoin’s adoption as legal tender in 2021. The podcast features a panel of diverse Salvadoran voices, including representatives from the private sector, the bitcoin community, and a traditional bank, providing a nuanced look at the impacts of this policy.

Key Themes and Ideas

The "Bitcoin Fixes Everything" Myth vs. Reality:

The podcast acknowledges the prevalent slogan within the Bitcoin community, "Bitcoin fixes everything." However, it immediately raises the question of whether this holds true, particularly in the Salvadoran context.

Quote: "this this saying of bitcoin fixes everything out there is very nice and looks really nice on shirts But there is a debate there if it really fixes everything..."

There's a recognition that the perception among some Salvadorans is that Bitcoin is primarily for the wealthy, with a sentiment that "we bitcoiners like to talk a lot about bitcoin but we don't like to spend it."

Problematic Implementation of the Bitcoin Law:

The panel broadly agrees that while the idea of adopting Bitcoin was potentially beneficial, the implementation was deeply flawed.

The Chivo wallet, the government-backed digital wallet, is consistently cited as a major source of problems:

It's seen as too politicized, with many associating Bitcoin directly with the government.

Users had negative experiences, including identity theft, failed transactions, and unresponsive customer service.

The focus was on the technology/wallet adoption rather than Bitcoin itself.

Quote: "they believe that bitcoin is chivo wallet it is the government and you have to get them out of there to start educating them start trying to really explain to them what bitcoin is."There was a failure to properly educate the populace.

The Issue of Mass Adoption and Financial Literacy:

The government’s push for rapid mass adoption is questioned. El Salvador has a large unbanked population with a low average level of education which made the rapid digital currency adoption difficult.

Guillermo Contreras (dito Banks) acknowledges the difficulty of introducing a digital wallet and a new currency to millions of people suddenly.

Quote: "Let us remember that El Salvador still has 65% of the unbanked population and the educational level of our population on average is sixth grade sixth level And this teaches you many things How does a digital medium manage to put a digital wallet with a new currency in the hands of 4 million people suddenly."

Private Sector Frustrations:

Leonor Selva (representing the private business sector) states that implementation of the Bitcoin law from the point of view of the private sector was "disastrous".

She cites time pressure for businesses to adapt, with government deadlines that were not achievable.

She mentions the lack of consultation with private sector implementers and companies developing the Chivo wallet, which made the system fail.

Quote: "all the companies that came here to execute the chib wallet project They said it couldn't be done in less than 6 months and the whole rollout I mean since Saturday since that Saturday that was 10 in the morning I was in my pajamas at home and the wallet file was announced the whole process including the adoption by your private company was 3 months so from there you are eh making the project fail..."

Volatility and Economic Hardship:

The panel agrees that El Salvador's population, which is sensitive to volatility and poverty, found it difficult to deal with Bitcoin's price fluctuations, leading to distrust and fear.

Quote: "I have seen Salvadorans in an ATM crying because they cannot withdraw the 3 dollars of the salary because it is the commission that the bank does not let you withdraw a nd they expected to earn $ I have seen adult men cry So it is a population so poor that it does not tolerate thevulnerability..."

Bitcoin's Positive Impact on the Country Brand and Tourism:

There is a consensus that the most significant positive impact of the Bitcoin law has been on the country's international image and tourism.
El Salvador is now recognized for Bitcoin, and this has brought attention and investment.

Quote: "bitcoin at the country brand level has been totally impressive but here come some questions also that we are seeing the issue of the Salvadoran benefit but at the country level right..."

It's acknowledged that tourism has grown significantly. However, questions are raised if this is benefiting the entire population equally, with a perception that the benefits of bitcoin at the country level are going to those who have more resources and are for the millionaires.

The Need for Regulation and a Broader Digital Asset Strategy

Panelists suggest the most helpful aspect of El Salvador’s digital currency policy was the promotion of digital assets in general, and the establishment of a regulatory framework for these.

Quote: "I like the direction that the government has given in the last two years, which is more to bitcoin as its spearhead for the promotion of digital assets or and to have a framework digital asset regulatory And be an H of innovation more than the bitcoin law..."

The Role of Bitcoin in the Unbanked Sector:

Guillermo Contreras argues that Bitcoin enabled easier tools for the unbanked to access the traditional financial world. He also highlights that it gave the means to do financial inclusion with digital tools in less than 5 minutes. He further points out that this was not possible previously because traditional banks are not interested in the unbanked sector.

Quote: "for me the greatest benefit that bitcoin generated in the population is that it allowed to provide the unbanked with easy tools to be able to start operating in the traditional financial world..."

The Reality of Bitcoin Spending

While many Bitcoin holders might prefer to keep the currency, data from dito Banks shows that much of the bitcoin that enters their system is converted to dollars for spending. This indicates a use case for Bitcoin as a transport of value and as a way to overcome barriers in money transfers.

Quote: "we moved 84millions of dollars in total through our ecosystem, bitcoin enters our ecosystem to be exchanged and spent, that is, it was no longer a purpose of keeping it to save, it was the purpose of exchanging it and spending it. And we saw that as a vehicle of value, it was a transport of value..."

The Impact on the Youth

The podcast acknowledges that one key discussion was missing: the impact of the law on young Salvadorans. The rapid adoption exposed young people to financial education and innovation in technology which was not previously available. This has led to the creation of a new generation of young developers and innovators.

The Imminent Reversal

During the course of the podcast, the news breaks that the Bitcoin Law has been reformed by the Legislative Assembly, repealing the legal tender status of the currency and eliminating the possibility of paying taxes with it. This proves many of the opinions stated by the panelists throughout the talk.

Criticism and Bitcoin Hypocrisy

One of the panelists criticizes the bitcoin community for not having been critical of the Chivo Wallet and for only criticizing it once they knew the law was going to be repealed.

Controversial Statements:

Leonor Selva states that the Bitcoin law could have been saved, and that the agreement with the IMF is showing that what the most important aspect of the digital currency policy was the regulatory framework and the innovation and not making it legal tender. She also states that no other country is following El Salvador’s route of a Bitcoin law, and other nations are more interested in tokenization and the regulation of digital asset agencies.
Guillermo states that bitcoin was never mandatory in El Salvador and that he has not heard of cases where the authorities forced businesses to accept the currency. Leonor responded that it was very mandatory because the government offered punishments to business who did not accept it when they inquired with the ministers and secretaries.

Concluding Thoughts

The podcast paints a complex picture of Bitcoin adoption in El Salvador. While the country has benefited from increased tourism and international attention, the implementation of Bitcoin as legal tender was plagued by challenges. The discussion highlights the importance of considering factors such as financial literacy, technological readiness, and societal context when adopting a digital currency. Many panelist expressed that the implementation itself had issues and that it had generated a bad experience for Salvadorans that have led to distrust of the technology. The key lesson to take away is that the adoption of digital currency requires careful planning, education and consultation with stakeholders.

The podcast is unique because it’s a rare discussion about the realities of Bitcoin adoption in El Salvador by people who have been working with it, not just those who are “cheering” from the outside. The news of the Bitcoin Law reversal at the time the podcast was being recorded was proof that many of the issues stated in the discussion were the main reasons for this policy change.