Nayib Bukele: Bitcoin's Bold Gambler 🎲
TGIF Dispatchers.
In June 2021, a young president virtually appeared at a Bitcoin conference in Miami and stunned the world with an announcement.
"Next week, I will send to Congress a bill that will make Bitcoin legal tender in El Salvador," declared Nayib Bukele, setting in motion a cryptocurrency experiment unprecedented in modern finance.
Four days later, El Salvador's legislature approved the Bitcoin Law with 62 out of 84 votes. By September, the small Central American nation had become the first country in history to adopt Bitcoin as an official currency.
That bold move transformed Bukele from a relatively unknown leader into crypto's most powerful political ally. Nearly four years later, his Bitcoin experiment has yielded both breakthroughs and failures that reverberate far beyond El Salvador's borders.
The man who calls himself "the world's coolest dictator" now finds himself at a crossroads – his Bitcoin holdings profitable but their adoption struggling, his international image both bolstered and tarnished, his country safer but less free.
As El Salvador continues to accumulate Bitcoin despite promises to the IMF not to, the story of Bukele's grand cryptocurrency experiment reveals deeper truths about the tensions between innovation and stability, between authoritarian control and financial freedom.
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Born in 1981 to a Palestinian-Salvadoran business family, Bukele grew up in relative privilege in San Salvador. After dropping out of law school at Central American University, he joined his father's advertising agency, eventually managing Yamaha Motors El Salvador and several other family businesses.
His political career started in 2012 when he was elected mayor of Nuevo Cuscatlán, a small town outside San Salvador, representing the left-wing Farabundo Martí National Liberation Front (FMLN). Three years later, he won the mayorship of San Salvador, the nation's capital, where his urban revitalisation projects built his popularity.
But tensions with the FMLN leadership grew.
In 2017, after Bukele allegedly threw an apple at a party council member and called her a "witch," the party expelled him. Undeterred, he founded his own political movement, New Ideas (Nuevas Ideas).
Unable to register his new party in time for the 2019 presidential election, Bukele allied with the centre-right Grand Alliance for National Unity (GANA). Leveraging his youthful image and social media savvy, he won the presidency with 53% of the vote, ending three decades of two-party dominance in Salvadoran politics.
His distinctive style, often sporting jeans, leather jackets and backwards baseball caps instead of traditional suits, helped cement his image as a break from the past. It was his approach to two key issues, though — gang violence and cryptocurrency — that would go on to define his presidency.
Before launching his Bitcoin initiatives, Bukele tackled El Salvador's gang crisis with Territorial Control Plan that dramatically reduced homicide rates from 38 to 1.9 per 100,000, but at the cost of constitutional rights and mass incarceration that has led human rights groups to document widespread abuses.
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Democracy or Dictatorship?
Bukele's governance style has grown increasingly authoritarian alongside his cryptocurrency experiments.
In February 2020, he entered the Legislative Assembly with armed soldiers to pressure lawmakers to approve a loan for security forces. In May 2021, the new Legislative Assembly, dominated by his party, removed and replaced all five magistrates of the Constitutional Chamber of the Supreme Court, as well as the Attorney General, consolidating Bukele's control over all branches of government.
Despite a constitutional prohibition on consecutive presidential terms, Bukele announced his intention to run for re-election. The restructured Supreme Court ruled in his favour, allowing him to seek a second term. He won re-election in February 2024 with a reported 85% of the vote, further cementing his power.
On social media, Bukele embraced the criticism, changing his X (formerly Twitter) bio to read "the world's coolest dictator" – a label that simultaneously mocks his critics and acknowledges the truth in their accusations.
This domestic consolidation of power has been accompanied by a shift in foreign policy, most notably a growing relationship with the Trump administration in the United States.
In March 2025, El Salvador began accepting deportees from the US, including migrants with no connection to El Salvador, housing them in the notorious CECOT prison. When a federal judge ordered a halt to the deportations, Bukele mockingly wrote on X: "Oopsie... Too late."
El Salvador has even held Kilmar Abrego García, a Salvadoran national wrongly deported from the US, despite a Supreme Court order for his return. In a recent development, sources revealed that the US President Donald Trump’s administration has directly contacted Bukele about García's detention, though the Salvadoran president reportedly rejected these overtures.
Bitcoin Country
As Bukele consolidated his security gains, he turned to his most audacious policy experiment: making Bitcoin legal tender.
On June 5, 2021, at the Bitcoin Conference in Miami, Bukele virtually announced his plan to introduce legislation requiring all businesses to accept Bitcoin alongside the US dollar (which had been El Salvador's official currency since 2001).
"This will generate jobs and help provide financial inclusion to thousands outside the formal economy," Bukele told the cheering crowd.
The law took effect on September 7, 2021, making El Salvador the first country in the world to adopt Bitcoin as an official currency.
To facilitate adoption, the government launched Chivo Wallet, a digital wallet app, and offered a $30 Bitcoin bonus to citizens who downloaded it. Bukele also announced that El Salvador would begin acquiring Bitcoin for its treasury, starting with 400 BTC the day before the law took effect.
Building on this momentum, in November 2021, Bukele unveiled plans for "Bitcoin City," a tax-free metropolis to be built at the base of Conchagua volcano and powered by geothermal energy. The city would be funded through "Volcano Bonds," with half the proceeds invested in Bitcoin and half in infrastructure.
The global crypto community celebrated Bukele as a visionary. For a moment, it seemed El Salvador might become the Singapore of cryptocurrency – a hub of innovation and wealth generation.
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Reality Bites
The implementation of Bitcoin as legal tender faced immediate challenges.
On launch day, the Chivo Wallet crashed repeatedly under the burden of mass registrations. Bitcoin's value dropped by nearly 20%, triggering protests in San Salvador where demonstrators burned Bitcoin ATMs.
Adoption among ordinary Salvadorans remained low. While around two-thirds of the population downloaded the Chivo Wallet to claim the $30 bonus, usage quickly tapered off. By 2024, only about 8% of Salvadorans were regularly using Bitcoin for payments.
Meanwhile, the government continued accumulating Bitcoin, reaching approximately 6,150 coins by early 2025 – worth about $600 million at current prices. The holdings have been profitable during Bitcoin's 2024-2025 bull run, but the volatility has created significant risk for a small economy like El Salvador's.
Bitcoin City and the Volcano Bonds have faced delays and diminished expectations. The planned $1 billion bond issuance never materialised at full scale, and construction on Bitcoin City has progressed slowly.
In December 2024, El Salvador reached a $1.4 billion loan agreement with the International Monetary Fund (IMF), which had previously expressed concerns about the country's Bitcoin strategy.
As part of the deal, Bukele agreed to "confine" Bitcoin use – including removing the requirement that businesses accept it, prohibiting tax payments in Bitcoin, and winding down the Chivo wallet.
Recent evidence suggests El Salvador has not fully abided by these conditions. Blockchain data shows the government acquired 7 Bitcoin worth over $650,000 in late April 2025, contradicting promises to halt government Bitcoin accumulation.
When confronted about these purchases, Rodrigo Valdes, an IMF director, offered a carefully worded statement: "I can confirm that they continue to comply with their commitment of non-accumulation of Bitcoin by the overall fiscal sector, which is the performance criteria that we have."
Analysts have suggested this wording provides a loophole, potentially allowing Bitcoin purchases through non-governmental entities while maintaining technical compliance with the IMF agreement.
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Nearly four years into El Salvador's Bitcoin experiment, the results remain mixed.
On the positive side:
The country's Bitcoin holdings have generated paper profits in the current bull market
El Salvador has gained unprecedented global visibility for a small Central American nation
Some crypto-related tourism and investment has materialised, particularly in coastal areas like El Zonte (nicknamed "Bitcoin Beach")
Salvadorans living abroad can send remittances with lower fees through Bitcoin channels
On the negative side:
Widespread adoption among citizens has not materialised
The promised economic transformation remains elusive
Environmental concerns about Bitcoin mining persist
The IMF and other international financial institutions remain skeptical
Technical infrastructure challenges continue to hamper usage
By March 2025, The Economist described El Salvador's Bitcoin experiment as a failure, concluding it had brought "more costs than benefits" to the economy. Yet Bukele has persisted, continuing Bitcoin purchases despite IMF restrictions.
Nayib Bukele's Bitcoin experiment reveals deeper tensions within the cryptocurrency movement itself – between libertarian ideals and the practical realities of state power.
When Bukele first announced Bitcoin as legal tender, many crypto enthusiasts cheered the validation from a sovereign nation. Here was government adoption of a technology designed largely to circumvent government control – a paradox that few stopped to examine in the initial excitement.
The contradiction at the heart of El Salvador's approach soon became evident. Making Bitcoin legal tender required compulsion (businesses must accept it), state infrastructure (the Chivo wallet), and centralised decision-making (government Bitcoin purchases) – elements that run counter to cryptocurrency's founding ethos of voluntary participation and decentralisation.
More troubling has been the juxtaposition of Bitcoin adoption with democratic backsliding. The same leader championing financial freedom has suspended habeas corpus, detained thousands without trial, and undermined institutional checks and balances. This creates an uncomfortable association for a technology that positions itself as a tool against authoritarianism.
For crypto advocates, Bukele represents both the promise and peril of state-led cryptocurrency adoption. His willingness to embrace Bitcoin on a national scale demonstrated possibilities that seemed theoretical before 2021. But his increasingly authoritarian governance raises uncomfortable questions about the alliance between cryptocurrency and political power.
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