El Salvador was once infamously known as the "murder capital of the world." According to a 2018 report by USAID, it's listed as one of the top five nations with the most consistent and high homicide rates, with hundreds of casualties mounting. Somehow, however, Nayib Bukele's rise to power within the country carved a path of salvation for the people of El Salvador. The aspiring leader brought significant crackdowns on internal violence and stabilized the country in order for it to attain progress once and for all. That progress benefited the country with peace, safety, and most of all, an economic opportunity of a lifetime. Nayib Bukele views El Salvador's tranquility from violence as a precursor towards a greater, more sustainable mission to enrich the livelihoods of his people. Safety of the streets doesn't immediately equate to the safety of the people's pockets after all. Instead of rallying with other nations or extracting loans from large institutions, he found potential in cryptocurrency's golden ticket, the Bitcoin, a form of digital currency that was created by a mysterious individual named "Satoshi Nakamoto." The currency itself enacts peer-to-peer money transactions between individuals without any sort of external, third-party interference from monetary institutions. This provides a variety of benefits for people across the globe, including  faster and cheaper transactions worldwide. (Kayal & Rohilla, 2021)
Nayib Bukele wants Bitcoin to become an official currency that could help the livelihoods of his people while also pursuing further national development through Bitcoin megaprojects that could potentially turn into sustainable sources of economic development. But the real question is, do the benefits  outweigh the risks when it comes to legalizing  a volatile cryptocurrency such as Bitcoin as legal tender within El Salvador?Â
El Salvador's Bitcoin journey started when its government officially declared Bitcoin as a form of legal tender back on the 7th of September, 2021. This made history as El Salvador finally became the first nation to adopt a form of cryptocurrency as a part of their national currency. As the country officially accepts Bitcoin as legal tender, Bitcoin could officially be used to pay for goods & services, taxes, debts, and remittances from the United States of America. Unfortunately, around 70% of El Salvador's populace aren't in possession of any bank accounts, an issue that led the government to create a Bitcoin transaction application called Chivo. Chivo's creation served as an opening for El Salvador's various Bitcoin megaprojects. The application allows its users to convert bitcoins into U.S. dollars, which then can be used to pay for services and goods around the country. Besides giving El Salvador access to bank accounts for easier digital transactions, the application also provides the users with multiple benefits, which include free Bitcoin transactions, a 30-dollar bonus inserted into each user's bank account by the government, and even provided discounts for goods that are bought using the Chivo application. (Alvarez, Argente, & Van Patten, 2023)
The Chivo application provides the citizens of El Salvador with efficient money transactions and technological familiarity regarding Bitcoin, but it doesn't truly present how El Salvador would double its economic growth. Because of this, Nayib Bukele planned two different megaprojects to implement economic growth within the country. One of these projects is called the "Visionary Freedom Program." This program, according to the official website of the El Salvadoran Government, Â intends to attract foreign investments into the country, assisting in its Bitcoin-related projects, infrastructure, and various other sectors within El Salvador. The country wants at least a thousand high net-worth individuals that could invest a minimum of one million dollars in Bitcoin in order to receive eligibility to gain citizenship within the country along with their families as soon as possible.Â
El Salvador's other mega project is much more significant to its national development, with funding of approximately 300,000 Bitcoins, or around $33.44 billion dollars at today's current exchange rate, that are collected through foreign investments and possibly volcano bonds collected from Bitcoin mining operations within the country. (Cohen, Victor, 2025).  This mega project envisions the creation of an environmentally and economically sustainable "smart city," or in this case, a "Bitcoin city," within its southeast territory. This smart city project was stated by Nayib Bukele as a paveway for "financial inclusion, foreign investments, tourism growth, innovation, and economic development" within the country of El Salvador during his speech at the Latin American Bitcoin & Blockchain Conference in 2021. The points stated by Nayib Bukele in that speech are shown through the project's vision. The project governs innovation in the form of generating geothermal energy, a form of renewable energy source, from a nearby volcano called the Conchagua. This allows the city to activate generators to generate power all over the area, including powering the generators for Bitcoin mining operations to collect more Bitcoin. The smart city project also emphasizes its potential for tourism and foreign investments, as Bitcoin City is envisioned  to become a tax haven within El Salvador, where citizens and foreign investors alike don't have to pay income taxes, property taxes, or  even procurement taxes, with the exception of value-added taxes (VAT) that are going to be collected for developments within the city, which is probably significant in numbers, as the city's construction consists of building commercial centers, houses, entertainment centers, power plants, and Bitcoin mining operations.
From these projects alone, it seems that El Salvador might turn itself into a cryptocurrency utopia with loads of foreign investments and domestic developments. However, in reality, there are some critiques prompted by the International Monetary Fund (IMF) towards the Bitcoin legal tender development within El Salvador. According to a 2025 report by the IMF, El Salvador's Bitcoin legal tender "doesn't satisfy the minimal requirements to operate as a currency, nor does it have the capacity to actually facilitate fast and cheap transactions." This statement is constructed through several reasonings. Firstly, operating a cryptocurrency like Bitcoin is no different than gambling loads of money for slim chances. In this case, the country must rely on chances that could assist it in avoiding high-level price fluctuations that Bitcoin usually goes through. Based on the report's findings, approximately 75% of investors lose their money from cryptocurrency investments, so a developing nation such as El Salvador will have to prepare a lot of strategic digital policies and educational awareness of their Bitcoin projects for the populace. Another reason explains the vulnerability and inadequacy of the Chivo application itself. The Bitcoin application created by the government could potentially expose its citizens' financial privacies to cyber-related crimes such as online fraud, hacking, or even artificial intelligence cybercrimes that aren't usually noticeable.Â
To make things more concrete, the report showed data regarding the personal thoughts of the El Salvador populace regarding the Bitcoin legal tender and its implementations across the country itself. With 95% of statements claiming Bitcoin has made no progress in developing the populace's economies, and another 77% stating that the government should stop wasting its funds on something as volatile as Bitcoin.Â
When it comes to financial inclusion, El Salvador's plan to integrate Bitcoin seems to be one of the most game-changing economic development ideas that has ever existed within this world. It brings about  sustainable innovation, diverse financial access, and an encouragement for humanity to adapt for the future. Its Bitcoin legal tender may serve as an economic shock to its populace and an unstable form of economy that relies on complex learning and financial gambling over loads of funds and investments, but it still has some time to develop itself from its limitations. So its benefits could outweigh its risks if the country consistently develops this legal tender carefully.
 The government will need to improve on the Chivo application's transparency and adequacy; it needs to develop better features for safety and efficiency from cyber attacks, and it needs to start informing international monetary institutions and its populace on how every civilian's financial privacy is protected, where the users' money is stored, and how they could earn various benefits from the application to provide better incentives for users. On stability, the government shouldn't use its political power to only enforce Bitcoin as a form of payment within every territory for the short term; it still needs to ease upon those still not aware of the whole Bitcoin integration project by allowing cash payments to thrive temporarily or even attempt to discover other digital payment alternatives, and most importantly, the government must forego better research on Bitcoin's unpredictable fluctuations, which is considered the most devastating aspect of adopting Bitcoin as a national currency. It needs to pour more investments into Bitcoin predictability and fluctuations research to ensure economic stability.
El Salvador is here to bring change into itself; it upholds so many economic risks to achieve a great point of national prosperity. But perhaps being alone within a complex, anarchic world may not be an efficient strategy. El Salvador might need to stop playing the "lone wolf" and start more bilateral or multilateral conferences or summits with other Latin American nations or even nations beyond its borders to finalize the perfect, proper, and safe Bitcoin legacy. A beaver's dam won't stay put without the strength and passion of other like-minded beavers.Â
