Cryptocurrency has skyrocketed in popularity over the past few years, and it has gained more formality as large institutions begin to use it. Advocates for the use of crypto reached a major milestone on September 7th, as El Salvador became the first country to accept Bitcoin as legal tender.

Text of the law states “the purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.” Bitcoin’s biggest advocate in El Salvador and face of this new program is the country’s president, Nayib Bukele.

Bukele believes that Bitcoin can push El Salvador towards becoming a developed nation, “My dream would be that El Salvador will transit its way from the Third World to the First World. It’s probably not going to be done in a couple of years but, you know, probably at least we can set up the path.”

Supporters of this move believe that bitcoin boosts financial inclusion in El Salvador. Around 70% of Salvadorans do not have access to financial services. Many hope that the crypto will help expand the country’s economy, even for its poorest citizens.

Another main argument for bitcoin’s adoption is to ease the transfer of remittances. Remittances are money sent home to El Salvador from family members working abroad and they account for about a quarter of the country’s GDP. Bukele and the law’s supporters hope bitcoin can make the process of transferring money across borders frictionless.

One day before the law passed, the central american country purchased 200 bitcoin, bringing its total to 400 bitcoin. The country’s wallet is worth roughly $20 million.

To facilitate the use of the cryptocurrency and increase its liquidity, El Salvaador created a crypto wallet app called Chivo. Salvadorans can use a national ID to sign up for the app and begin transactions with bitcoin. As an incentive for citizens to download the app, users will receive $30 worth of bitcoin if they sign up.

Chivo has been off to a rocky start, marked by technical difficulties. The app has experienced many crashes on the google play store. Many are concerned with lack of access to the app, as much of El Salvador does not own a smartphone.

Ricardo Castaneda, a Salvadoran economist, criticizes the app’s rollout, “There has been a high degree of improvisation in the rollout of Chivo and a great deal of opacity. The app asks for access to your microphone and your contacts, which are not needed for a wallet. Bitcoin might be a distraction but given the decision to push ahead with the plan despite popular opposition and the advice of experts, it could also be an important pillar of Bukele’s political project.”

The adoption of crypto in the country has not been met without large criticism. Some polls report that two-thirds of Salvadorians oppose the bitcoin law. Most oppositions of the law cite lack of access and volatility of the crypto. Thousands have taken to the streets to protest the new law. A bitcoin ATM was even vandalized.

Protests in San Salvador marched in the streets this past week, criticizing the law as a power grab by Bukele. Many are not just concerned about the bitcoin adoption law, but also the growing authoritarianism of Bukele and his government.

The eccentric President has been replacing federal judges and continues to gain power. He seemingly has control of El Salvador’s three branches of government. There is also a new court ruling allowing for the President to serve two consecutive terms, just in time for Bukele’s reelection in 2024

The 40 year old leader took to twitter to respond to criticism from the Biden administration, “But with all due respect: we are cleaning our house … and that is none of your business.”

Salavoran protestors donned signs that read, “Bukele dictator.” Others interviewed on the street expressed their discontent with the government and its leader.

“It’s important to say this morning: Enough already! What the government is doing is arrogant, it is authoritarianism,” an older protestor noted.

A Salvadoran student criticized his president’s demeanor, “I don’t like the way he (Bukele) is behaving at all, he is like a capricious child.”

While many crypto advocates were excited to hear of the adoption of crypto’s flagship currency, the process may not be what they envisioned. El Salvador has deep rooted issues and it does not seem like the adoption of bitcoin will solve them anytime soon.