Latin American Countries Following El Salvador’s Bitcoin Approach

Latin American countries following El Salvador's Bitcoin approach

After El Salvador’s president, Nayib Bukele declared bitcoin as a legal tender along with the Fiat[1], it is hard not to consider what will happen next in the other neighboring Latin American countries. 

Albeit cryptocurrency’s current mass adoption by institutions like Visa, JPMorgan and the US Bank, we are still seeing some resistance against such adoption in certain Latin American countries.

For instance, Mexico’s President, Andrés Manuel López Obrador, stated that the country was unlikely to follow in El Salvador’s footsteps by adopting cryptocurrencies like Bitcoin as legal tender alongside fiat[2].

President Obrador further stated that part of Mexico’s main concern against adopting bitcoin is one surrounding tax evasion. Although the country has many individuals in the public and private sector who back the use of crypto, authorities reported in 2020 that cartels had been increasingly laundering funds through digital assets[3].

However, not everyone in Mexico is against crypto adoption. Earlier this year on June 28, 2021, Ricardo Salinas Pliego, the founder of Banco Azteca, stated that Banco Azteca may become Mexico’s first bank to start accepting the cryptocurrency[4].

Even though there is some governmental resistance, we still see some support favoring the crypto adoption in Mexico and other Latam countries through Bitso. 

Bitso is the first Latam crypto exchange platform, licensed and regulated by the Gibraltar Financial Services Commission. Bitso promotes financial innovation and has been in continuous conversations with the Mexican financial regulators who support the enactment of the Fintech Law in Mexico[5].

Paraguayan lawmakers are also promoting the adoption of crypto into their country. Paraguayan congressperson, Carlitos Rejala, hinted that crypto would be connected to “an important project to innovate Paraguay in front of the world”. 

This would be possible through collaboration with local crypto figures “in order for Paraguay to become a hub for the crypto investors of the world.”[6]

Nevertheless, resistance against crypto adoption in Mexico continues. On September 10, 2021, Mexico’s central bank governor pointed out the need for reliability in terms of payment executions and value, stating “people will not want their purchasing power, their salary to go up or down 10% from one day to another. 

You don’t want that volatility for purchasing power. In that sense, it is not a good safeguard of value.”[7]

The warning words of the Mexican governor are genuine concerns to keep present when considering whether to adopt or not crypto currency in some Latam countries. Crypto adoption in Latam countries may be a good avenue to slowly teach citizens how to transact in crypto and what to expect from such transactions. 

On the other hand, not all Latam citizens may have the financial stability to deal with the volatility that such crypto currency presents. There is still much to learn and more Latam crypto development to come.   


Nicolle Lafosse

[1] Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it. Most modern paper currencies are fiat currencies, including the U.S. dollar, the euro, and other major global currencies.

[2] Mexico’s president rules out accepting crypto as legal tender. October 14, 2021.

[3] Mexico’s president rules out accepting crypto as legal tender. October 14, 2021.

[4] Mexico says cryptocurrencies are not money, warns of risks. REUTERS By Abraham Gonzalez and Anthony Esposito. June 28, 2021

Bitcoin as a legal tender – EL SALVADOR

Bitcoin in latin america and El Salvador

Bitcoin (BTC) was invented by a pseudonymous individual or group named Satoshi Nakamoto in 2008 and is the world’s first enduring cryptocurrency that succeeded where decades of digital cash experiments failed.

Bitcoin is a decentralized electronic currency that does not need an intermediary to process it and where there is no entity in charge of issuing Bitcoin.

In early September 2021, El Salvador officially recognized BTC as legal tender — a landmark move that could offer an important case study for other countries in the region. The state-issued Chivo wallet enables individuals and businesses to send and receive payments in BTC or dollars from anywhere in the world[1].

El Salvador is making history by becoming the first country in the world to have adopted BTC as their legal tender. As part of this initiative, President Bukele enacted the Bitcoin Law which details how BTC will be regulated within the country.

This is not the first time El Salvador adopts a different currency as their legal tender. Back in 2001, Salvador got rid of its former currency due to its lack of stability and adopted the US Dollar.

The Salvadorean government is now trying to implement a similar action plan by adopting BTC as their legal tender and stating that since BTC is not prone to inflation it will provide financial stability to their country. Nevertheless, we need to keep in mind that although BTC is not affected by inflation, it is a volatile cryptocurrency that may be riskier than inflation itself.

Another thing to consider is that due to BTC’s high volatility, there is a high risk of losing the money saved in the Chivo wallet in a matter of seconds. This risk does not likely outweigh the benefit of having an electronic wallet and it is also a risk that not many Salvadoreans are able to afford. 

A few questions should be made regarding El Salvador’s BTC adoption as a legal tender. For instance, what happens when a merchant receives payment at a high with an expected profit and the next day BTC crashes? The merchant now has a big loss that may prevent him from purchasing the goods necessary to continue running their business. Who will carry the risk volatility?

Moreover, El Salvador Bitcoin Law on its Art. 7[2] imposes a financial risk by requiring all local merchants to accept BTC as a means of payment rather than leaving it up to the merchant to take on that financial risk or not. 

The Salvadorian population may not be ready to take on the volatility that is inherent to cryptocurrency. Having BTC as a reserve asset may be a more suitable approach to countries like El Salvador where the population has little to no education as to the financial risks of BTC and who may not be able to make it through a crypto market crash.

For more legal info visit

 (1)Decree No. 57 Bitcoin Law.


[2] Decree No. 57 Bitcoin Law Art. 7: Every economic agent must accept Bitcoin, as a form of payment when it is offered to him by whoever acquires a good or service.