Bitcoin Payments: Real-World Adoption and Remaining Challenges

Bitcoin was conceived as peer-to-peer electronic cash, but its use for payments is difficult to measure accurately because transactions may pass through exchanges, custodial wallets or the Lightning Network. El Salvador made Bitcoin legal tender on September 7, 2021, and distributed $30 worth of Bitcoin to every citizen who registered for its Chivo wallet, creating the world's first nationwide experiment.

In practice, Bitcoin is more commonly used for travel spending, cross-border remittances and high-value online transactions, while credit cards and mobile payments remain dominant in everyday retail. On January 29, 2025, El Salvador's legislature amended the law to end the requirement for private businesses to accept Bitcoin and stipulated that taxes could be paid only in US dollars. The changes were tied to a $1.4 billion financing agreement proposed by the International Monetary Fund in December 2024, underscoring the limits of the legal-tender experiment.