Weighing the Pros and Cons of El Salvador’s Bitcoin Adoption

Abstract

In early September 2021, El Salvador became the first nation to adopt the cryptocurrency Bitcoin as legal tender, in a move that the country’s president says will help modernize its financial infrastructure. But the adoption pushed many citizens to the streets in protest, saying that Bitcoin would remain inaccessible to a large part of the country and would primarily benefit wealthy investors. With Bitcoin and other cryptocurrencies climbing in popularity and mainstream acceptance, El Salvador’s adoption may be examined as a test case for other nations considering a similar move. This short case asks students to weigh the risks and benefits of Bitcoin as a legal tender.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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