What do Salvadorans really think of Bitcoin?

In pre-Hispanic times, the indigenous peoples who lived on the land we now call El Salvador used cocoa beans as their dominant medium of exchange. In 2021, the people living on this same land use Bitcoin.This radical evolution of humanity’s relationship with money fascinates me, and it was one of the main reasons driving my travels to El Salvador. I wanted to truly understand the technology, whether it had the power to live up to its promise, and whether locals were really on board with this transformational shift. But before I get into my experience, we first need to dig into a little background to better understand the context of this historic moment.Between cocoa beans and Bitcoin, El Salvador’s currency has changed many times. When the Spanish came, they were forced to adopt the Spanish colonial currency. Then silver coins called reales, then something called Bambas, then Salvadoran Colones, and finally, in 2001, the adoption of the US dollar.The ‘Dollarization’ of El Salvador (2001)As I have previously discussed, the civil war from 1979–1992 forced many Salvadorans to move abroad to the United States. Naturally, these immigrants stayed connected with their family and friends back in El Salvador and sent them money or ‘remittances’ to support them through the difficult times in El Salvador. These remittances meant large amounts of US dollars were being transferred from the United States to El Salvador and then exchanged for the Salvadoran Colon once it arrived in El Salvador. This artificially inflated the price of the Colon beyond what it was actually worth, making El Salvador’s exports much less competitive and hurting economic growth.The government decided at the turn of the century that adopting the US dollar would solve this problem, as well as bring greater stability to the country, lower interest rates, and attract…