Last year, El Salvador decided to abandon the dollar as its national currency in favor of the digital currency Bitcoin, choosing to hold its central bank reserves in Bitcoin. Bitcoin was established as a permanent reserve. After making this decision, which many observers described as crazy, the price of Bitcoin experienced a continuous decline over several months, losing more than 70% of its value, making the authorities' decision appear like a form of political and economic madness at that time.
However, things changed with the recent rise in Bitcoin's value, surpassing its historical highs. El Salvador transitioned from a poor, indebted country to one that may suddenly be able to pay off all its debts. Furthermore, the Salvadoran authorities plan to issue bonds, or state loans, based on Bitcoin, which would set a precedent globally.
In conclusion, it seems that El Salvador has become the first laboratory for a country to officially deal in digital currencies instead of any national currency, much like Chile was a laboratory for economic liberalism during the Pinochet era in the 1960s.
