Did El Salvador OFFICIALLY Give Up on Bitcoin?! | EP 1602

Nico Moran (0:02)

Bloomberg made a new announcement this morning about El Salvador moving away from Bitcoin for payments. Of course, El Salvador famously was the first country to make Bitcoin legal tender, and the government has slowly but surely built up the fifth largest strategic Bitcoin reserve in the world. But there's been a very real concerted attack on El Salvador since the IMF forced them to repeal, or at least pull back on the legal tender status of Bitcoin in 2025 And now today, this morning, Bloomberg is reporting that El Salvador is turning to stable coins for payments. So what is really happening with Bitcoin in El Salvador? Now, before I get into, actually, maybe I'll just read the initial kind of tweet here from Bloomberg. Here's Bloomberg's tweet this morning at 6:20 a.m., and it goes, A government-backed app will let Salvadorians send and hold digital dollars, including for remittances using Coinbase's base network. Now, going over to Bloomberg again, I don't have a Bloomberg account, so we're just going to read the headline. It goes, Buckele turns to stable coin as Bitcoin payments fail to catch on. So obviously, Bloomberg, they're not the biggest fans of Bitcoin, so you can kind of see where the headline is coming from, right? But this is, I think, part of the broader conversation that us Bitcoiners have to had to, I don't know, deal with, to kind of contest with, is, look, Bitcoiners, we have this view, and this is our thesis, that eventually Bitcoin will become the world reserve currency, that eventually everyone will come to the understanding that we have that Bitcoin is the best money. Now, when you talk to a lot of alt coiners, yeah, I'm still early, a lot of alt coiners, people that aren't so bullish on Bitcoin, they always roll out the same tired FUD line that Bitcoin only does six or seven transactions, and it will never scale to everyone using Bitcoin, therefore, this is why we need alt coins and further stable coins.

But in the more recent years, what we have seen is, I wouldn't say necessarily something that has destroyed the Bitcoin thesis, that Bitcoin will be used as money, but we have seen a proliferation of stable coins around the world. People want to use stable coins. We had this idea that once people understood Bitcoin, they would drop their local fiat currency, they would drop their Zelle and their Venmo, and they would start to use Bitcoin. What we've seen is that in reality, it's a little messier. It's not as black and white. It's a little more gray. That there is a process going on here. And maybe it's because people either, one, just don't fundamentally understand Bitcoin, or two, maybe it's because Bitcoin is such alien technology that they start to move towards, like in baby steps towards Bitcoin, which is they're so used to using dollars, they're so used to using some form of a digital dollar on a Venmo, or what's the ones they use in the UK and in South America? It's like Waze, I think it is. We're so used to just using dollars. It's how we think of money.

And therefore, there's been this kind of intermediary step here, and this is just how it's playing out, that people, maybe they don't trust a local currency, but the step to, or the divide between a quote unquote dollar, a currency of your local country. And then you go to this alien, non-parallel, completely separate system that is Bitcoin. It's like a Grand Canyon divide. And so kind of in the middle has been the adoption of stable coins, which is what we've seen happen, is people are so familiar with dollars, or again, their local currency, that they just want a quote unquote stable version of that, they can send, that they can use, they can store, but Bitcoin is still super volatile. So it scares a lot of people away. And what we've seen is that stable coins are very popular around the world. I know a lot of Bitcoiners don't like to talk about it, but stable coins are extremely popular. People like the idea of stable digital money. Now, whether it is stable, it's a whole other conversation, a whole other can of worms that I don't necessarily feel I need to get into. But we have the common trope, stable coins are stable until they aren't. We've seen this happen over time. And further, yes, stable coins may be stable, but you're still priced in your local currency, and there's still a certain amount of inflation, the basement built into it, baked into that digital dollar. And so what's really the point? That's what us Bitcoiners, hardcore Bitcoiners say all the time. But we can't really ignore the fact that a lot of people are attracted to stable coins, that they are using stable coins. You know, Tether is one of the most profitable companies in the world. And further, we have seen a recent push from the US administration that, hey, we are going to dollarize the rest of the world through dollar-peg stable coins. So all of this stuff is playing out. And it's just very interesting, the psychology of it. Because for us Bitcoiners, whether you've been in a Bitcoin for a long time, or you're newer to Bitcoin, something in your background made you understand Bitcoin. And you see the revolution, you see the revolution or technology that is Bitcoin. You understand the big picture of it. But a lot of people, maybe it's because they don't understand money, or they don't even understand their local currencies and how it works and what the problems really are. They just view, hey, I can download a stable coin wallet. I get paid in dollars. It's stable. It's pegged to the dollar. And I can use that as my payments and savings mechanism. And hey, as long as I'm saving something, it's better than saving nothing. And further, because Bitcoin is so volatile, yeah, maybe I'm not gonna get the incredible gains of Bitcoin, but at least I'm not gonna get a 50% haircut on my savings because of a bear market or worse, 80%.