Bitcoin as a legal tender; not so far off

[fuguebtc]

Governments can't control it, yet El Salvador decided to make Bitcoin legal tender. Ironic, isn't it? Imagine how things would be if institutional investment firms and governments amass a large portion of the circulating supply. BTC will be highly unequal and less-decentralized. To be able to buy/sell BTC, you'd be forced to use a centralized exchange or service as the supply lies in the hands of such entities. So making Bitcoin legal tender would have little or no relevance at all.

Besides, the masses consider BTC as the "next digital Gold". Not as an alternative currency for payments. Even the LN has failed on making BTC practical for daily payments. At least, mainstream adoption for BTC is on the rise. Legal tender or not, it will be here to stay for a long time.

There is no irony because El Salvador does not have their own national currency. They used USD as their main currency before the economy before adopting bitcoin, and in the world, there are not many countries that do not have their own currency like them.


Yes, using bitcoin as currency will create huge inequality as people/countries holding more bitcoins will become richer while people/countries holding less bitcoins will become poorer. This happened during the gold standard era and no one wants to go back to that era, especially the poor because they hardly own any bitcoins.

We need to admit that an asset with limited supply, high volatility and decentralization cannot be a currency and that does not bring much benefit to the modern economy we live in.

[Abiky]

Governments can control many things including national policies on many industries but they can not force citizens to do whatever they want. Citizens have freedom and they always want to have freedom so more or less, citizens in any nation will try to chase freedom and dislike unreasonable mandatory enforcements from government. Government can think a policy is good and serves citizens but if citizens don't see it helpful, they will have many other choices and ways to adapt to and stay away from that mandatory policy.

If you live in a communist/socialist country such as China, Russia, or Venezuela, then we could say the government can force you to do whatever it wants. Freedom (sort of) is only attainable in countries with a democratic political system (usually developed countries). But even such countries have their own restrictions (laws), so if you're caught doing something "wrong", you can easily face fines or jail time.

I'm afraid that Bitcoin becoming a legal tender currency worldwide, would only be a pipe dream. As long as it's not mandatory for mainstream use, merchant adoption will remain low. Probably forever. It's this reason why Fiat will always be the preferred choice for payments. At least, we're free to be our own banks with BTC. You can either use it as "Digital Gold" or as a currency. The choice is yours. One thing is certain, and that's demand for Bitcoin will continue to rise "for infinity and beyond".

[Smack That Ace]

I'm afraid that Bitcoin becoming a legal tender currency worldwide, would only be a pipe dream. As long as it's not mandatory for mainstream use, merchant adoption will remain low. Probably forever. It's this reason why Fiat will always be the preferred choice for payments. At least, we're free to be our own banks with BTC. You can either use it as "Digital Gold" or as a currency. The choice is yours. One thing is certain, and that's demand for Bitcoin will continue to rise "for infinity and beyond".

If we dare to face the truth, the idea of bitcoin becoming a legitimate global currency is really a pipe dream. Governments will never accept a currency they cannot control and they have no shortage of better solutions. There is no reason for them to favor a currency they did not create and cannot control.

Additionally, bitcoin has too many limitations to be a currency as it can only process 7-10 transactions per second, which is too slow compared to traditional payment systems like Visa or MasterCard, let alone compared to altcoins.
Given Bitcoin's decentralized nature and security, it is more suitable as a store of value, an asset like gold.

[Catenaccio]

If we dare to face the truth, the idea of bitcoin becoming a legitimate global currency is really a pipe dream. Governments will never accept a currency they cannot control and they have no shortage of better solutions. There is no reason for them to favor a currency they did not create and cannot control.

They dislike Bitcoin, no doubt but if they can not kill Bitcoin, and they actually have failed to do that, they have to change their mindset, policies and regulations on Bitcoin. Over many years, more than one and a half decades, governments have started to accept Bitcoin in more nations globally. It's an upward adoption trend for Bitcoin at government and national scales.

Additionally, bitcoin has too many limitations to be a currency as it can only process 7-10 transactions per second, which is too slow compared to traditional payment systems like Visa or MasterCard, let alone compared to altcoins.
Given Bitcoin's decentralized nature and security, it is more suitable as a store of value, an asset like gold.

Bitcoin is better than gold from total supplies to its security and privacy for Bitcoin holders. Gold is very cumbersome for gold holders while Bitcoin is very light and easy to own and store safely, securely and flexibly for Bitcoin holders.

The bullish case for Bitcoin is a book with a lot of insights on Bitcoin and comparison between Bitcoin and gold.

[WatChe]

If we dare to face the truth, the idea of bitcoin becoming a legitimate global currency is really a pipe dream. Governments will never accept a currency they cannot control and they have no shortage of better solutions. There is no reason for them to favor a currency they did not create and cannot control.

Additionally, bitcoin has too many limitations to be a currency as it can only process 7-10 transactions per second, which is too slow compared to traditional payment systems like Visa or MasterCard, let alone compared to altcoins.
Given Bitcoin's decentralized nature and security, it is more suitable as a store of value, an asset like gold.

The primary reason why governments are not willing to adopt decentralized Bitcoin is because they don't have any control over that financial system. It's really that simple.

For centuries, every government has full full control over financial system of the country through fiat system. The reason why government likes Fiat currency is because they not only control it but they can also manipulate it according to their requirement.

As far as limitations of Bitcoin like scalability is concerned, we have fix for them available in the form of LN. But that's secondary issue.

[CryptoYar]

[...]

Exactly I agree main reasons are that governments would never accept currency they can not control and Bitcoin network is too slow to handle massive number of transactions needed for everyday use. Because of these issues many people agree with you that Bitcoin is better suited as store of value much like digital gold other than regular currency. It is considered long term asset for savings and protecting wealth not for daily purchases.

[EarnOnVictor]

For Bitcoin to be adopted as a legal tender, off course it must go through certain processes, but these processes are not ambiguous to say the least. Countries like El Salvador and not so recently The Central African Republic are Trail Blazers in the aforementioned. Looking at it realistically, the merits would certainly alleniate any demerits that may occur. It surely puts innovation where it should be on a pedestal, foreign cash injection becomes and the global phenomenon; inflation can be better managed. What is holding back is definitely from constituted authority, as households and individuals already accept Bitcoin in some forms as a legal ten. What is stopping it's gradual integration?

I've witnessed countless posts on this forum about Bitcoin being a global legal tender. As good as this sounds, can it be? I guess not! Bitcoin is an asset, but the distinction here is that it is differently structured, which makes it unique. But this uniqueness doesn't fully exonerate it from the centralized government, because Bitcoin is decentralized. This singular factor alone is enough to dissuade the governments that are known for absolute control from allowing Bitcoin as a legal tender.

I see the world's governments stockpiling more Bitcoin in the future as an alternative reserve. But allowing it to be spent as a legal tender in their country? I strongly doubt that.

Notwithstanding, it takes countries and Blocs like the US and EU to start the legal tender before the world will follow, and not El Salvador or other low-ranked economies.

[Zlantann]

[...]

Exactly I agree main reasons are that governments would never accept currency they can not control and Bitcoin network is too slow to handle massive number of transactions needed for everyday use. Because of these issues many people agree with you that Bitcoin is better suited as store of value much like digital gold other than regular currency. It is considered long term asset for savings and protecting wealth not for daily purchases.

The government could make regulatory laws that can give them have a slight control over Bitcoin transactions. Some wallet addresses can be directed by the government to be censored and decentralized exchanges can be banned. This will force people to use only centralized platforms where KYC is compulsory. Although the government can not totally control the Bitcoin ecosystem but they can make it difficult for people to enjoy the freedom its offers. Bitcoin volatility and the use of Bitcoin mainly as an asset might some of the reasons why it is not yet popularly used as currency.       

[slaman29]

Notwithstanding, it takes countries and Blocs like the US and EU to start the legal tender before the world will follow, and not El Salvador or other low-ranked economies.

I think even a smaller bloc like BRICS would be enough. Definitely I think El Salvador not  good example because its not just a small economy but basically it wasn't a democratic idea, it was 1 guy's idea.

I bet you is a small country like Iceland voted to do it it would have way more impact.

[Bitcoin_people]

El Salvador has recognized Bitcoin as legal tender. This is the first country in the world to recognize Bitcoin in its country. However, people will be more enthusiastic about this Bitcoin as its popularity increases, since Bitcoin's popularity has now advanced much more than before, so it will reach a better position in the future. Countries that have not yet given Bitcoin legal tender may soon be ready to give it to those countries as the popularity of Bitcoin is increasing day by day, which is why many countries are interested in Bitcoin. Moreover, in countries where there is legal certainty on Bitcoin, Bitcoin is also used in those countries but it is secret.
Moreover, the investment of Bitcoin by big companies in the world and many countries makes us more interested, especially to get financial freedom. Bitcoin is a great currency. However, we should take Bitcoin to a higher position and convey its popularity to people so that it becomes stronger in the future.

[Marvell1]

As far as limitations of Bitcoin like scalability is concerned, we have fix for them available in the form of LN. But that's secondary issue.

This is a secondary issue but not easily solved and has not yet been fully resolved. If LN is a viable solution for the bitcoin network, why hasn't it become popular yet?
While LN offers fast transaction speeds and low fees, it is not perfect and also has its drawbacks such as being quite complicated to use and centralization risks. Meanwhile, many people around the world have difficulty even accessing bitcoin, they can't even store it themselves (non-custodial wallets). Do you think they can easily use LN to pay their daily bills? I even believe that many of us have never used LN and don't know how to use it, let alone regular users.

[WatChe]

This is a secondary issue but not easily solved and has not yet been fully resolved. If LN is a viable solution for the bitcoin network, why hasn't it become popular yet?
While LN offers fast transaction speeds and low fees, it is not perfect and also has its drawbacks such as being quite complicated to use and centralization risks. Meanwhile, many people around the world have difficulty even accessing bitcoin, they can't even store it themselves (non-custodial wallets). Do you think they can easily use LN to pay their daily bills? I even believe that many of us have never used LN and don't know how to use it, let alone regular users.

What I was saying in my earlier post is regarding adoption of decentralised Bitcoin by governments. My point is that main reason why governments are not willing to adopt decentralised Bitcoin is because they can't fully control or manipulate it. Of course their are limitations associated with Bitcoin like it's scalability issue but that's not the primary reason why governments are not accepting it.

I do agree that LN is a solution to solve scalability issue though not widely used but if somebody wants to move toward decentralised Bitcoin adoption then where there's will there's way.

[Abiky]

If we dare to face the truth, the idea of bitcoin becoming a legitimate global currency is really a pipe dream. Governments will never accept a currency they cannot control and they have no shortage of better solutions. There is no reason for them to favor a currency they did not create and cannot control.

Additionally, bitcoin has too many limitations to be a currency as it can only process 7-10 transactions per second, which is too slow compared to traditional payment systems like Visa or MasterCard, let alone compared to altcoins.
Given Bitcoin's decentralized nature and security, it is more suitable as a store of value, an asset like gold.

Then why did El Salvador adopt Bitcoin as legal tender? If it did it, any other country can do it. It's just that most governments are skeptical of using Bitcoin as a currency. They prefer people to adopt it as a store of value just to "prevent" BTC from gaining dominance over Fiat. So far, their efforts are working as Fiat is still King. I wouldn't expect things to change anytime soon.

If there's going to be another country that will adopt Bitcoin as legal tender, that would be a developing (third-world) country. Developed countries such as France, UK, Germany, the US, and Japan won't even bother trying to make Bitcoin legal tender. It's just not worth it. After all, they have thriving economies. Let us be grateful that at least we have an escape route from the centralized financial system. Things would've been much worse if Bitcoin didn't exist. Kudos to Satoshi to wherever he/she is.

[Danica22]

Then why did El Salvador adopt Bitcoin as legal tender? If it did it, any other country can do it. It's just that most governments are skeptical of using Bitcoin as a currency. They prefer people to adopt it as a store of value just to "prevent" BTC from gaining dominance over Fiat. So far, their efforts are working as Fiat is still King. I wouldn't expect things to change anytime soon.

El Salvador has accepted bitcoin as legal tender but still uses USD as the main currency, they dare not eliminate USD and only use bitcoin. Furthermore, bitcoin is no longer a legal tender in El Salvador as of February 2025.

More importantly, many surveys show that 93-95% of people do not want to use bitcoin as a currency, the majority still only use USD as currency in El Salvador. Therefore, the government does not need to ban people from using bitcoin as currency because most people do not want to use it that way anyway. Bitcoin is too volatile, transaction fees and transactions are sometimes slow, it is not suitable for daily domestic transactions.

[hd49728]

El Salvador has accepted bitcoin as legal tender but still uses USD as the main currency, they dare not eliminate USD and only use bitcoin. Furthermore, bitcoin is no longer a legal tender in El Salvador as of February 2025.

El Salvador made Bitcoin legal tender in their nation years ago in the past market cycle in 2021

In a world first, El Salvador makes bitcoin legal tender.

Last year, in 2024, El Salvador complied with IMF requirements on Bitcoin legal tender withdrawn.

More importantly, many surveys show that 93-95% of people do not want to use bitcoin as a currency, the majority still only use USD as currency in El Salvador. Therefore, the government does not need to ban people from using bitcoin as currency because most people do not want to use it that way anyway. Bitcoin is too volatile, transaction fees and transactions are sometimes slow, it is not suitable for daily domestic transactions.

Don't need the IMF request and legal tender status withdrawn in the nation, it's naturally to see how its national Bitcoin legal tender failed and not supported by citizens in the nation. This policy was intentionally enforced by the government while citizens have different social and economic statuses so that they have different financial adaptability with Bitcoin market volatility. They definitely are not able constrain well with Bitcoin volatility and with individuals or small merchants, price volatility can harm their individual finance or small company finance.