Can bitcoin surpass the dollar in popularity and make El Salvador the first state to operate entirely with a private currency?
Date: September 14, 2021
Topic: Finance & Financial Regulation
This piece was original published in Money Review and is forthcoming in El Economista.
In September 2021, the government of El Salvador became the first to make bitcoin legal tender. This means it can now be used to make payments and settle debts, if businesses have the technology to accept it. Importantly, one of the implications of this legal change is that if creditors do not accept settlement of debts in bitcoin, then that debt is cancelled.
It is worth mentioning that El Salvador has been fully dollarised since 2001, in other words, it does not have its own