El Salvador’s Bitcoin (BTC) reserve has had limited impact on the broader population, and the country’s loan agreement with the International Monetary Fund (IMF) may further complicate its Bitcoin strategy, according to Quentin Ehrenmann, general manager at My First Bitcoin, a non-governmental organization (NGO) focused on Bitcoin adoption.
Ehrenmann told Reuters that repealing the Bitcoin legal tender laws under the IMF agreement has created a vacuum in public BTC education or state-led adoption initiatives. In a translated statement, he told the news outlet:
“Since the government entered into this contract with the IMF, Bitcoin is no longer legal tender, and we haven’t seen any other effort to educate people. The government, apparently, continues to accumulate Bitcoin, which is beneficial for the government — it’s not directly good for the people.”
The Central American country also agreed not to purchase any new BTC under the agreement, a detail that was confirmed in a recent IMF report, which contradicted claims by El Salvador’s Bitcoin Office that the country is accumulating BTC daily.
El Salvador’s legislature rolled back public sector involvement in Bitcoin in January to remain compliant under the IMF loan deal, sparking debate about whether the country’s Bitcoin experiment ended in failure.
Related: El Salvador hasn’t bought Bitcoin since signing loan deal, IMF says
Cointelegraph gets the scoop from Salvadorans
Cointelegraph visited El Salvador in 2023 to get the scoop on how small businesses and everyday Salvadorans were using Bitcoin.
Joe Hall used Bitcoin to pay for his hostel stay using IBEX Pay, a payments company facilitating BTC payments to merchants over the Bitcoin Lightning Network.
The Lightning Network is used to send Bitcoin almost instantly and is more suited for everyday, small purchases such as a cup of coffee or a meal at a restaurant.
“It’s faster than the credit card,” the hostel employee accepting the Bitcoin Lightning payment told the reporter.
Despite this, a lack of education remained a barrier to the widespread adoption of Bitcoin in El Salvador, according to the reporter, who had to show the hostel clerk how to accept a payment over the Lightning Network.
Magazine: What it’s actually like to use Bitcoin in El Salvador