El Salvador’s Bitcoin Beach embraces a new legal tender, but digital divide makes it hard to ditch US dollar
- El Salvador adopted bitcoin as legal tender last Wednesday, drawing inspiration from the country’s Bitcoin Beach
- Many people still shy away from using the cryptocurrency because internet access is patchy, bringing attention to a large digital divide
The El Salvadoran beach town of El Zonte is visibly poor, with dirt roads and a faulty drainage system. But in one way, it’s ahead of the rest of the country: it has bitcoin.
The tropical surfing spot’s basic infrastructure offers a glimpse of the potential pitfalls to popularising bitcoin nationally for payments and savings, after Congress last Wednesday adopted the cryptocurrency as legal tender, a world first.
Take Zulma Rivas. The 38-year-old mother of three started accepting bitcoin payments last year for the bags of cut fruit she sells from a tray to tourists, part of an experiment called Bitcoin Beach aimed at making the town one of the world’s first bitcoin economies.
President Nayib Bukele cited Bitcoin Beach as inspiration for his push to adopt the cryptocurrency nationally. The town’s use of a platform called Lightning Network to enable smaller transactions has helped overcome some of the technical and practical obstacles to using bitcoin as a currency, Bitcoin Beach’s founders say, which could be useful on a larger scale.
But for Rivas, cash is king. She rarely uses bitcoin, she says, because like many in the town, her battered smartphone struggles with the payments app. When Reuters visited last week, the device was broken. Anyway, she often runs out of data on her prepaid contract.