El Salvador has been in the global spotlight on several occasions since it adopted Bitcoin as a forced tender. Several initiatives have emerged related to its adoption of Bitcoin as a currency, one of which is the creation of Bitcoin City on a beach. However, creating a city from nothing requires enormous resources—resources that El Salvador lacks. El Salvador returned to the headlines by announcing the issuance of the first Bitcoin bond to finance Bitcoin City. Now that the price of Bitcoin has plummeted, El Salvador is back in the news for increasing its purchases of the famous cryptocurrency.
This article is analyzes what is behind El Salvador’s affair with Bitcoin, which so far can be divided into four acts:
- Implementation of Bitcoin as a forced tender
- Creation of a public fund that invests in Bitcoin
- Creation of Bitcoin City
- Issuance of Bitcoin bonds
Make yourself comfortable because these acts are increasingly outlandish, and each has proven to be a resounding failure so far.
The Bitcoin–El Salvador relationship has very little to do with either the adoption of stable money or progress. It has much more to do with trying to prevent the country from going bankrupt, with increasingly long odds.
