Cryptocurrencies have continued to decline this week with billions wiped out of value from tokens such as bitcoin. The crash is affecting investors around the world, including the government of El Salvador. The Central American country poured millions of dollars into bitcoin and made it legal tender nine months ago, encouraging people to use it for day-to-day transactions.
From trinkets and tacos to petrol and even houses – you can buy a lot with bitcoin in El Salvador. Buying cryptocurrency from street vendors and major chains alike is a remarkable experience.
It shows how far bitcoin has come since it was dreamed up on internet forums in 2008.
President Nayib Bukele’s decision to make the cryptocurrency legal tender means that in principle it should now be accepted by all businesses, along with El Salvador’s other currency, the US dollar.
But the latest cryptocurrency crash has raised more questions about the policy, specifically the use of nearly $100 million of public money to buy bitcoin – each purchase celebrated with a tweet by the president.
The country’s 2,300 bitcoins are now worth half what the government paid for them, but the finance minister dismissed the criticism, saying there was “extremely minimal financial risk”.