Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/283832 
Year of Publication: 
2023
Series/Report no.: 
WIDER Working Paper No. 2023/136
Publisher: 
The United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki
Abstract: 
This paper provides a contextual analysis of the adoption of Bitcoin as legal tender in El Salvador. First, we outline the historical context and the political situation of the period 2019- 24 that serve as context for the passage and implementation of the Bitcoin law (Decree No. 57). We identify the institutional and political context and the main areas of contention. Next, we delve into the macroeconomic context of El Salvador, outlining the fundamental features of its economy and highlighting how they relate to currency issues. Our analysis reveals that the adoption of Bitcoin cannot be understood without factoring in the mounting strains surrounding dollarization, remittances, and foreign debt. We conclude by putting forth a set of hypotheses regarding the potential dynamics and future of Bitcoin as legal tender in El Salvador that point beyond Bukele's tactics.
Subjects: 
cryptocurrencies
Bitcoin
El Salvador
international political economy
digital finance
JEL: 
E42
Persistent Identifier of the first edition: 
ISBN: 
978-92-9267-444-1
Document Type: 
Working Paper

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