What Does El Salvador Look Like After Making Bitcoin Official Currency?

Right after I hopped out the back of a pickup in El Zonte, El Salvador, I recognized I wasn’t in an ordinary beach town. El Zonte’s welcome sign had two Bitcoin logos, its cafes offered 75% Bitcoin discounts and its trash cans sported the Bitcoin emblem. I’d been hitchhiking my way through the country’s west coast, enjoying its world-class surf conditions last month, and wasn’t looking for its Bitcoin epicenter. But somehow, I’d stumbled right in.

When El Salvador made Bitcoin legal tender last September, many — myself included — reacted skeptically. Nayib Bukele, El Salvador’s president, seemed to be YOLOing away the country’s treasure like a Reddit-addicted crypto trader.

Bukele bought millions of dollars worth of Bitcoin, complained he “missed the f***ing bottom by 7 minutes,” then Bitcoin’s price tanked, costing the country dearly. It seemed like a mess. But the reality on the ground, I found, is more complicated than the narrative. There’s a good chance El Salvador’s Bitcoin experiment works out, at least in some ways. 

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Community Outreach Origins

The Bitcoin movement in El Salvador began in El Zonte when a California surfer named Mike Peterson received an anonymous $100,000+ Bitcoin donation for the town’s residents. Peterson had been doing community work in El Zonte for years and accepted the money with a mandate to get it in people’s hands. “We formulated a plan to start injecting Bitcoin into the community,” he told me. “And it kind of just exploded from there.” 

Bitcoin took off in El Zonte for a reason: it was useful to its people. The first, most immediate benefit was it helped Salvadorians avoid exploitative remittance fees they paid on the $6 billion that friends and family outside the country sent back each year.

Less apparent, but perhaps more important, was that 70% of the people in El Salvador were unbanked, and a digital wallet would help them start investing. “The Salvadorian people don’t have bank accounts — now they do,” explained Roman Martinez, who works with Peterson in El Zonte. “People are buying an asset for the first time.”