The Cultural Political Economy of Bitcoin in the Global South19.11.2023
https://www.wider.unu.edu/publication/political-economy-bitcoin-legal-tender-el-salvador
Tobias Boos and Juan Grigera published a UNU-WIDER Working Paper entitled “The political economy of Bitcoin as legal tender in El Salvador. Temporary Bandages for Permanent Wounds?”.
Boos, Tobias, and Juan Grigera. “The Political Economy of Bitcoin As Legal Tender in El Salvador: Temporary Bandages to Permanent Wounds?”, WIDER Working Paper 2023/136 Helsinki: UNU-WIDER, 2023. https://doi.org/10.35188/UNU-WIDER/2023/444-1.
Abstract
This paper provides a contextual analysis of the adoption of Bitcoin as legal tender in El Salvador. First, we outline the historical context and the political situation of the period 2019–24 that serve as context for the passage and implementation of the Bitcoin law (Decree No. 57). We identify the institutional and political context and the main areas of contention. Next, we delve into the macroeconomic context of El Salvador, outlining the fundamental features of its economy and highlighting how they relate to currency issues. Our analysis reveals that the adoption of Bitcoin cannot be understood without factoring in the mounting strains surrounding dollarization, remittances, and foreign debt. We conclude by putting forth a set of hypotheses regarding the potential dynamics and future of Bitcoin as legal tender in El Salvador that point beyond Bukele’s tactics.