Within three years of the period, El Salvador & Central African Republic (CAR) failed to use Bitcoin as a legal tender. This development raised a very big tension among Bitcoin enthusiasts over the future adoption of Bitcoin as a payment tool.
Bitcoin Adoption as a Legal Tender in El Salvador & CAR
In Sep 2021, El Salvador adopted Bitcoin as a currency under the presidency of Nayib Bukele. This development created a type of peer pressure on other countries to step into the Bitcoin adoption race.
In particular, Central African Republic (CAR) president Faustin Archange Touadera was impressed by El Salvador’s leadership for Bitcoin adoption and he also followed Bukele’s footsteps & introduced Bitcoin as a legal tender in the jurisdiction of CAR.
At the time, Bukele predicted that more countries would start adopting Bitcoin as a currency in the future.
Bitcoin Lost Its Currency Status!
The Central African Republic (CAR) adopted Bitcoin as a currency in April 2022 but without following any systematic plan and failed to see any significant adoption & use of Bitcoin in the payment system. So finally, in early 2023, the CAR agreed to repeal the adoption of Bitcoin as legal tender & finally, in March 2023, the CAR parliament reversed this decision, removing Bitcoin’s status as legal tender.
On the other hand, on 29 Jan 2025, El Salvador removed Bitcoin from the legal tender status. The country’s Legislative Assembly voted to remove Bitcoin’s status as legal tender to comply with an agreement with the International Monetary Fund (IMF) for a $1.4 billion credit line.
Has Bitcoin Failed as a Legal Tender?
Following such bad developments around Bitcoin, many Bitcoin critics jumped against Bitcoin & Bitcoin advocates and stated that Bitcoin can’t achieve the status of legal tender permanently in any jurisdiction.
In particular, popular Bitcoin critic Peter Schiff called El Salvador’s Bitcoin adoption a failed experiment & also claimed that only 8% of citizens of this country use Bitcoin payment but only for one time. So we can’t call it a store of value or currency.
A similar kind of criticism was also faced by Bitcoin when Bitcoin lost its legal tender status in CAR.
Despite these two big negative developments around Bitcoin over the last 2 years, we can’t say that here Bitcoin has failed as a legal currency because there are still many positive things where we can see that Bitcoin is playing a better role than top traditional financial assets:
(1) Strengthened Bitcoin’s Use as a Store of Value
Although, indeed, Bitcoin is no longer mandatory for payments, it still remains a valuable asset for individuals and institutions who have been investing in this top Cryptocurrency.
For example, pro-Bitcoin countries like El Salvador are still holding Bitcoin in their national reserves, showing & boosting long-term confidence among retail investors.
(2) Increased Regulatory Clarity
The majority of the regulatory bodies under the pro-crypto leadership of governments are refining their regulatory approach to Bitcoin, which ultimately may lead to clearer regulations that attract institutional investors at more big levels.
Also, much clearer & perfectly structured policies around this top Cryptocurrency can encourage wider adoption in a way that fits within existing traditional digital financial systems.
(3) Bitcoin Adoption Is Driven by Users, Not Governments
The whole crypto community knows very well that Bitcoin’s global adoption continues to grow even though it lost its status of legal tender.
The primary vision of Bitcoin founder Satoshi Nakamoto was to make Bitcoin free from government controls and provide primary strength under a decentralization environment under the influence of the public, meaning it does not need government backing to remain valuable.
(4) Focus On Bitcoin’s Core Use Cases
Over the last 5 years, Bitcoin emerged as the digital version of gold & also proved itself more as “digital gold” rather than an everyday transactional currency.
The latest change in the landscape around Bitcoin use highlights its role as a store of value rather than volatile daily use.
(5) Encourages Innovation in Bitcoin Payments
This negative development also hinted that there is a need for improved & better infrastructure (like Lightning Network) to make Bitcoin easier for payments.
So we can say that such developments are imposing a type of pressure on companies and crypto developers to focus on making Bitcoin payments more user-friendly without relying on government mandates. Also, here, it is a type of opportunity for the old & new fintech firms to take advantage by providing Bitcoin payment in total integration with the traditional financial system.
Bitcoin Use as a Non-currency Will Retard Adoption?
Bitcoin critics believe that Bitcoin is no longer useful or are trying to spread negativity around top Cryptocurrency by using such statements.
But here, people need to know that Bitcoin can be used as a payment method if two parties agree, whether it is El Salvador or CAR. Also, here, we need to understand that not only El Salvador & CAR but also some other countries like Bhutan and the USA are on the path of Bitcoin adoption in the form of the country’s treasury.
So here we can say that Bitcoin is still available to use in payment systems, but there is no restriction on any person for its acceptance, which is another good thing that aligns with the basic fundamentals of Bitcoin.
Bitcoin Adoption Race
This year many countries jumped in the Bitcoin adoption race via investing & mining Bitcoin. However, currently, the USA holds the highest amount of Bitcoin, seized from the bad actors who were misusing Bitcoin for money laundering or drug dealing activities, but from the perspective of pure Bitcoin investment, there are now many countries in this race.
Bitcoin Price Action
At the time of publication of this report, the current trade price of Bitcoin is $95,856 & this price level is 2% down over the last 24 hours trading period.
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