Nayib Bukele is the President of El Salvador and the leader who made his country the first nation in the world to adopt Bitcoin as legal tender.
Bitcoin Legal Tender
In June 2021, El Salvador’s Legislative Assembly passed the Bitcoin Law, making Bitcoin legal tender alongside the U.S. dollar. The government launched the Chivo Wallet, a state-backed Bitcoin and dollar wallet, and offered $30 in Bitcoin to every citizen who downloaded it. The initiative was one of the most significant real-world tests of Bitcoin as a national currency.
El Salvador also began purchasing Bitcoin for its national treasury, with Bukele often announcing purchases on social media. The government invested in Bitcoin mining operations powered by geothermal energy from the country’s volcanoes and announced plans for “Bitcoin City,” a planned city funded by Bitcoin-backed bonds.
Reception
The Bitcoin legal tender experiment drew mixed reactions. Bitcoin advocates praised Bukele for advancing nation-state Bitcoin adoption and providing financial services to the country’s large unbanked population. Critics — including the IMF, World Bank, and credit rating agencies — warned about fiscal risks, volatility exposure, and the potential for losses on the government’s Bitcoin holdings. Domestic adoption has been modest, with most everyday transactions in El Salvador still conducted in U.S. dollars.
Political Context
Bukele is a popular but controversial figure. He won re-election in 2024 by a wide margin after his security crackdown dramatically reduced El Salvador’s murder rate. He has been criticized by international observers for democratic backsliding, including concentration of executive power and mass incarceration policies.