When El Salvador adopted Bitcoin as a legal tender, the decision was confronted by people’s different views on this take. While some applauded the initiative and the approach of embracing technology, others considered that the president took a risky move while the country faced other problems.
After three years of adoption, El Salvador created educational materials and programs to help citizens and worldwide users understand Bitcoin and how it can help the world. Although the government encountered some issues, such as the slow adoption rate and financial struggles, it seems like neighboring countries want to follow the same path and adopt crypto technology to mitigate innovation and improvement. Now that the Bitcoin price is peaking and more countries leverage it, it’s the perfect time for Argentina to use it.
Collaboration between El Salvador and Argentina
Recently, two of the countries’ representatives met to discuss cryptocurrency adoption so that Argentina could access the knowledge and experience of using Bitcoin and mitigating challenges. Based on El Salvador’s Bitcoin use cases, the president of Argentina’s National Securities Commission and the president of El Salvador’s National Commission of Digital Assets discussed a potential collaboration for nurturing cryptocurrency regulation.
Argentina has already taken a lawful approach to crypto, passing requirements for crypto firms following Javier Milei’s presidential mandate. At the same time, the country is preparing to make Bitcoin usage legal, along with other cryptocurrencies, which would provide considerable legal support for allowing the country’s financial turnaround to be based on it.
What could El Salvador teach Argentina?
El Salvador gained considerable experience by working with Bitcoin as a developing country, and considering that Argentina is on a similar economic level, it may be possible for it to adopt Bitcoin better.
El Salvador lacked the legal and institutional framework for approaching such technology, so it encountered the following problems:
- Citizens weren’t convinced of Bitcoin’s assurance, so more than half of the country’s population did not use it two years after its implementation;
- The government wasn’t prepared for the legal and fiscal challenge of adopting a cryptocurrency;
- The app through which Salvadoreans were supposed to make Bitcoin transactions was often slow and inefficient;
- Due to considerable incentives offered to citizens, hackers quickly got into their accounts and stole US$30 from each registered user;
Still, Bitcoin didn’t solve the country’s financial problems
The president adopted Bitcoin for many reasons, including helping citizens who couldn’t benefit from banking services and making the country an investment pool for foreign investors. However, adopting Bitcoin did not deliver the desired results.
While mobile cellular subscriptions in El Salvador have increased considerably in the past two decades, the number is still negligible compared to the number of citizens. According to Statista, in 2022, there were about 181,63 subscriptions per 100 inhabitants, and The World Bank tells us that 63% of the population was using the internet in 2020. Therefore, using Bitcoin is difficult without a mobile phone or internet connection, so the numbers recorded show us a different society than reality.
El Salvador is one of the poorest countries in Latin America, with the highest poverty rate. People don’t have access to food and basic needs. Forty percent of the population is still vulnerable, as their earnings are scarce. Public services, social protection, and human capital need improvement.
Argentina also has its problems
Argentina has numerous issues that the government should tackle before Bitcoin. The biggest and most detrimental is the high inflation, which expanded to 57% in 2024, according to Statista. Low wages, crime, and corruption closely followed, but few others troubled citizens.
Argentina says that there is a lot to learn from El Salvador, as the representative stated that collaboration would help the country flourish considerably. Since Argentina has slowly become more Bitcoin-friendly since some years ago, it might be easier for it to adopt Bitcoin as legal tender, especially since the country’s president seems to have taken a unique approach to improvement and development.
Using Bitcoin is legal in Argentina, so anyone can make payments and bind contracts through the blockchain. Moreover, the country created the Registry of Virtual Assets Service Providers in order for the crypto sector to develop within a legal framework.
The disadvantages of adopting Bitcoin as a currency
Indeed, adopting Bitcoin as a legal tender might not be straightforward, considering it’s a digital coin not linked to any official financial body. Adopting Bitcoin at the moment would pose challenges to users as it’s not widely accepted, and only a few companies would receive it as payment.
At the same time, buyers are not protected from wallet theft or volatility, so they cannot contact anyone in case something happens since the networks are decentralized and run by millions of worldwide nodes and validators.
However, the regulatory limit is one of the most challenging aspects of adopting Bitcoin. Although Bitcoin has been on the market for some time now, governments have avoided providing adequate laws and guidelines on crypto. Although it has imposed taxing restrictions in numerous places, the documentation and filing are quite confusing, so it’s difficult for users to introduce their information correctly.
The advantages of adopting Bitcoin
However, there are also various benefits of adopting Bitcoin as a cryptocurrency, especially when we consider its efficiency and speed for transactional purposes. At the same time, Bitcoin could provide inflation protection, which could save developing countries like Argentina, Venezuela, or Brazil from being heavily affected by high inflation.
Moreover, Bitcoin offers diversity and accessibility to funds, which can help people unable to access banking services to save up and gain revenue. Crypto blockchains are also transparent, limiting the risk of centralization and fraud.
What do you think about the collaboration between Argentina and El Salvador?
El Salvador is the first country to make Bitcoin legal tender, and Argentina wants to follow the pattern and bring more financial stability and improvement through a partnership with El Salvador. Representatives from the two countries met and discussed possible common grounds, so we might soon see Argentina transact freely with Bitcoin.