Has Adopting Bitcoin as a Legal Tender Been a Good Idea?

Back in April 2022, the Central African Republic (CAR) passed legislation to make Bitcoin legal tender, meaning businesses, individuals, government departments, etc. were required to accept it as a form of payment. Likewise, El Salvador made the same move in September 2021. Has this worked out for either country?

In March 2023, the CAR repealed the law, citing a lack of adoption and criticism. They originally believed it would help control inflation, give them a bit of economic freedom on the global stage, foster a culture of innovation and technology, and attract outsiders. They even wanted to build a Bitcoin City. None of this happened, though. The main reasons for the failure are that the CAR is one of the poorest countries in the world, ranking near the bottom on the Human Development Index, with nearly 80% of its population living below the poverty line, 85% of the population lacks electricity, and only 10% of the people have the internet. So it's infeasible to expect people living in abject poverty to have the necessary devices and the technical knowledge to use Bitcoin, especially when they don't have the Internet or even electricity. Bitcoin adoption was premature. (https://www.worldbank.org/en/country/centralafricanrepublic/overview#:~:text=With%20a%20population%20of%20about,of%20191%20countries%20in%202022).

El Salvador is still officially using Bitcoin, but the results are questionable. Bukele has committed some $75 million in state resources to buy nearly 2500 Bitcoin. They've even created their own crypto wallet (called the Chivo Wallet), are in the process of launching thousands of BTC ATMs, funding crypto education, and have distributed small amounts of BTC to the local population to help spur adoption. Despite all of these actions, the average person still does not understand BTC, does not understand how to use BTC, does not understand the benefits of BTC, does not have the necessary devices or internet access, etc. According to surveys, 2/3 of the country thinks the adoption of BTC is a failure, and 3/4 of the country has never tried to use any cryptocurrency. (https://crypto.news/few-people-sent-money-to-el-salvador-using-bitcoin-and-crypto-in-h1-2023/). In fact, these statistics are dropping over time.

So it seems the two examples of national governments adopting BTC as a legal tender didn't work as intended. If we are going to reach mass adoption, then we need to be honest about the technical and socioeconomic challenges of using BTC and other cryptos. Right?

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