Understand the implications of Bitcoin's downfall in El Salvador. Learn about the failed economic bet and its impact on the country's financial stability.
The reason El Salvador stopped using Bitcoin as a legal tender is not because it’s some sort of failed experiment (it had issues, but still), but due to continuous pressure of IMF interested in maintaining a US dollar-centric economy.
El Salvador is reliant on US dollars in its economy, which puts it under heavy US influence. Knowing Salvadoran currency wouldn’t be strong, Nayib Bukele suggested an alternative option - risky, volatile, but free from pressure of other countries and strongly appreciating in the long run. IMF didn’t like it, and that’s where we are.
So, when you cheer Bitcoin not being legal tender anymore, you also cheer US and IMF projecting power over the country.
Its even funnier. They just straight up promised them a billion dollar loan on the condition that they abandon bitcoin.
In December, the government struck a $1.4 billion loan deal with the International Monetary Fund (IMF) that scaled back its bitcoin embrace after the lender urged officials to limit its exposure. The lender specifically advocated making acceptance of bitcoin voluntary for the private sector, which is spelled out in the hastily-approved law.
They were forced to stop using Bitcoin as legal tender by external parties. The question people should be asking is why? And the answer is not that it was a failed experiment.
The experiment was whether or not they could be independent monetarily. Not whether or not blockchain works. But whether, in actual practice, if it could provide the monetary independence some people claim it has the power to do.
Outside influences were strong enough to overwhelm Bitcoin adoption and it succumbed to those outside influences. As an experiment seeking to test whether or not Bitcoin could resist these influences it failed.
This is how experimentation works. Now you can tweak your experiment and try again, but acting like failing at the exact thing you were trying to accomplish is somehow not an experimental failure is just delusional.
Let’s not get astray here.
The reason El Salvador stopped using Bitcoin as a legal tender is not because it’s some sort of failed experiment (it had issues, but still), but due to continuous pressure of IMF interested in maintaining a US dollar-centric economy.
El Salvador is reliant on US dollars in its economy, which puts it under heavy US influence. Knowing Salvadoran currency wouldn’t be strong, Nayib Bukele suggested an alternative option - risky, volatile, but free from pressure of other countries and strongly appreciating in the long run. IMF didn’t like it, and that’s where we are.
So, when you cheer Bitcoin not being legal tender anymore, you also cheer US and IMF projecting power over the country.
Yeah the headline is insane. This would have been a wildly successful experiment, and now is a great time to cash out.
I guess they made a deal to sell their coins to the US.
Edit: misinformation, sorry. They’re not selling. they’re still buying. The IMF is just forcing them to strike the word legal tender
Its even funnier. They just straight up promised them a billion dollar loan on the condition that they abandon bitcoin.
https://www.reuters.com/world/americas/lawmakers-el-salvador-rush-new-bitcoin-reform-after-imf-deal-2025-01-30/
Site doesn’t load
The link is still working and reuters is a huge organization so its probably an issue on your side.
Nope. Their site is always broken. It doesn’t work on tor browser in strict mode. Try it.
We shouldn’t be linking to such websites
Hot damn why is this not the headline we are seeing
Thats what im wondering, because thats the blog post headline i first saw.
Exactly. The title is misleading af
They were forced to stop using Bitcoin as legal tender by external parties. The question people should be asking is why? And the answer is not that it was a failed experiment.
The experiment was to move beyond external parties. They were not able to do so and returned to using external parties. Ergo “the experiment failed”.
They were forced to do it by the IMF and US
Why do you think that they’d care about it if it was failing?
So they experimented with resisting the US and IMF and it was not successful.
We call that an experimental failure.
You really don’t get it. “Blockchain” was not the experiment. “Utilizing blockchain in the global economy” was the experiment.
And it failed.
https://i.imgflip.com/9j0u6j.jpg
Again, for the people in the back:
The experiment was whether or not they could be independent monetarily. Not whether or not blockchain works. But whether, in actual practice, if it could provide the monetary independence some people claim it has the power to do.
Outside influences were strong enough to overwhelm Bitcoin adoption and it succumbed to those outside influences. As an experiment seeking to test whether or not Bitcoin could resist these influences it failed.
This is how experimentation works. Now you can tweak your experiment and try again, but acting like failing at the exact thing you were trying to accomplish is somehow not an experimental failure is just delusional.