Can Bitcoin Be a National Currency? El Salvador Is Trying to Find Out. - WSJ

https://www.wsj.com/articles/bitcoin-national-currency-el-salvador-11645026831

1. El Salvador adopted Bitcoin as a national currency, along with the US dollar, in early 2022. The government of El Salvador spent $180 million rolling out Bitcoin ATMs and an e-wallet (Chivo) with $30 worth of free Bitcoin for anyone who signed up. What were the early challenges that residents of El Salvador faced and explain their mistrust in Bitcoin?

2. As related to the three functions of money covered in the lecture, 

• Medium of exchange: ability to obtain goods and
  services.
  • Unit of account: the ability to compare the value of things; a
  measuring stick.
  • Store of value: ability to accumulate wealth over time. Which function(s) is Bitcoin failing to achieve in El Salvador? Briefly explain why.

3. El Salvador also became the first country to issue bitcoin-backed sovereign bonds to international investors. Please describe how these bonds work (how much will bond sale raise in what currency? how will the proceeds be used?). What is the risk that El Salvador faces to back their bonds with Bitcoin?

 

Answer rating: 100% (QA)

Early challenges faced by residents of El Salvador included technological barriers as many were unfamiliar with using digital wallets and lacked acces... View the full answer