El Salvador’s attempt to embrace Bitcoin (CRYPTO: BTC) as legal tender has conclusively proven that the cryptocurrency is not viable as a widespread payment system, according to an analysis by John Paul Koning.
What Happened: Even with government support, adoption sputtered, Koning stated in a blog post.
Bitcoin’s inherent volatility and impracticality render it unsuitable for everyday transactions, dimming any hopes of it becoming a widely-used form of electronic cash.
“El Salvador’s four-year Bitcoin experiment definitively proved that Bitcoin is not destined to be money,” Koning wrote. “Even with government mandates, subsidies, and the elimination of tax barriers, Bitcoin payments never gained traction.”
El Salvador made Bitcoin legal tender in 2021, requiring businesses to accept it and offering incentives such as zero capital gains tax and fee-free transactions.
The initiative was meant to increase financial inclusion and lower remittance costs.
However, according to data from El Salvador’s central bank, the percentage of total remittances sent via Bitcoin …
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