In January 2025, El Salvador quietly removed Bitcoin from its list of legal tender, and President Bukele had to face reality and sign this decision. This marks the end of an ambitious financial experiment.

Four years ago, El Salvador became the first country in the world to adopt Bitcoin as legal tender, attracting widespread attention. The government launched the digital wallet Chivo and airdropped $30 worth of Bitcoin to each citizen, attempting to promote the adoption of this new policy.

However, the original intention of this decision has not been fully realized. A netizen reported that the remittance fees have not decreased as expected, and the public still has to wait in long lines to exchange for dollars. Another commenter pointed out that the 400 Bitcoins previously purchased by the government have incurred a paper loss of 55 million dollars.

President Bukele's initial idea was to reduce remittance fees through Bitcoin, potentially saving the country about $400 million per year. However, subsequent turbulence in the cryptocurrency market, including the collapse of LUNA and the bankruptcy of FTX, led to a significant drop in Bitcoin prices, which in turn increased the sovereign debt risks for El Salvador.

The International Monetary Fund ( IMF ) once used a $1.4 billion rescue package as leverage to demand that El Salvador revoke Bitcoin's legal tender status. The latest data shows that the 2,380 Bitcoins held by the government still have a floating loss of 34%, while Standard & Poor's has downgraded the country's sovereign credit rating to B-.

In the face of this situation, President Bukele has remained silent on social media, only retweeting an announcement regarding the postponement of volcanic bonds. This series of events reflects the challenges and risks of introducing cryptocurrency into the national financial system, and it has also sparked thoughts about future similar attempts.