El Salvador
Tether brings USDT to Bitcoin and Lightning Network
Published
4 weeks agoon
By
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Tether’s latest move puts USDT directly on Bitcoin’s infrastructure, allowing stablecoin transactions to settle faster and more efficiently via the Lightning Network.
Tether (USDT), the world’s largest stablecoin issuer, has announced its integration with Bitcoin’s (BTC) ecosystem, marking a new step in the stablecoin’s expansion beyond traditional blockchain networks.
Revealed on Jan. 30 at the Plan B conference in El Salvador, the move will bring USDT to both Bitcoin’s base layer and its high-speed Lightning Network, unlocking new possibilities for remittances, payments, and everyday transactions.
Tether CEO Paolo Ardoino described the initiative as a push toward real-world financial applications, stating that the goal is to offer “practical solutions for remittances, payments, and other financial applications that demand both speed and reliability.”
Meanwhile, Elizabeth Stark, CEO of Lightning Labs, stressed the broader impact, saying, “Millions of people will now be able to use the most open, secure blockchain to send dollars globally. It all comes back to Bitcoin.”
The key to making this possible is Taproot Assets, a protocol developed by Lightning Labs that enables asset issuances on Bitcoin’s base layer while allowing transactions to be settled on the Lightning Network.
Released in 2023, Taproot Assets effectively bridges stablecoins and other digital assets into Bitcoin’s infrastructure, making micropayments more efficient and reducing transaction costs.
Once fully integrated, USDT will function seamlessly across Bitcoin’s main chain and its Lightning-powered layer 2 network, combining Bitcoin’s security with Lightning’s near-instant transaction speeds.
Stablecoins have grown into a $220 billion asset class, with USDT dominating the sector. As of Jan. 30, USDT has a market capitalization of $139.4 billion, nearly three times that of its closest competitor, Circle’s USD Coin (USDC), which stands at $53.1 billion.
In 2024 alone, USDT processed over $10 trillion in on-chain volume, rapidly approaching Visa’s annual payment volume of $16 trillion.
Tether’s latest announcement follows its recent relocation to El Salvador, the only country where Bitcoin holds legal tender status.
However, in a parallel development, El Salvador’s Legislative Assembly amended its Bitcoin Law on Jan. 30, reversing the mandatory acceptance of Bitcoin and making it optional for merchants. The change aligns with International Monetary Fund conditions for a $1.4 billion loan to support the country’s economy.
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Berlin El Salvador
How Bitcoin Taught a Nation to Dream
Published
1 week agoon
February 15, 2025By
adminThis article is part of a four-piece series on El Salvador. You can find the previous dispatch, a story on El Zonte, here.
There was formidable energy at this year’s Plan B conference in El Salvador.
The event, which took place on Jan. 30-31, was historic for many of its 2,500 attendants. It was the first Bitcoin forum in the Central American nation to have a full dual-language agenda — meaning sessions in both English and Spanish.
For Roman Martínez, a Salvadoran co-founder of Bitcoin Beach, Plan B was a dream come true, because it enabled ordinary Salvadorans to make sense of their country’s Bitcoin experiment and ponder their own place within it. “Up until now, every Bitcoin conference was geared towards foreigners,” he told me on the first day, in Spanish. “Not everybody knows English. It’s already hard to learn a complex topic in your own language. In another, it’s three times harder.”
Martínez was involved in organizing the event. The expectation, he said, was for maybe 100 to 150 Salvadorans would show up — but more than 1,500 tickets were sold to Spanish speakers. “I’ve never seen so many Salvadoran faces at a Bitcoin conference,” he said. “We’re arriving at a point where Salvadorans are realizing that Bitcoin isn’t going anywhere, and either we learn to become part of it right now, or we’re going to be left behind.”
I could feel it too.
The English-speaking area, located at the Sheraton Presidente San Salvador Hotel, had crypto celebrities on stage including Tether CEO Paolo Ardoino, and OGs like Samson Mow, Jimmy Song, Blockstream CEO Adam Back and early Bitcoin developer Peter Todd. “We are witnessing a battle between centralized and decentralized systems!” Walker America, host of THE Bitcoin Podcast, shouted at the conference’s opening panel.
Yet that side of the conference felt somewhat formulaic compared to the Spanish-speaking zone, held at the Museum of Arts of El Salvador, which was absolutely electric. Over there, Salvadorans of all stripes outlined plans to help their country develop — from providing new educational opportunities, to mixing Bitcoin with dental care, to discussing the government’s strategy with the International Monetary Fund (IMF). Many of the panel speakers, young Salvadorans themselves, had fire in their eyes.
“We are in the right place in the world at the right time in history,” Gerardo Linares, co-founder of Bitcoin Berlín (the initiative behind the nation’s second Bitcoin circular economy) said to a completely bewitched audience. “It’s all happening right here, in El Salvador.”
A conference for Salvadorans
I was struck by the Spanish area’s demographic makeup. Crypto conferences are famously male-dominated; participants often complain of having to navigate a sea of dudes. The English-speaking zone was like that — maybe 90% male and 10% female.
The Spanish side was much more balanced, with a ratio of approximately 60% men and 40% women. While the majority of attendants sported black and orange Bitcoin T-shirts, you also saw middle-aged Salvadoran couples wearing elegant Salvadoran outfits, and twenty-something university students with turtlenecks and notepads.
I asked Evelyn Lemus and Patricia Rosales, two of the Salvadorans who spearheaded the Bitcoin initiative in Berlín, what they thought of the female attendance rate. They didn’t seem surprised. “There is a new generation of Salvadoran women who do not depend on men,” Rosales, a single mother herself, told me.“
In El Salvador, most of the time, it’s women who manage family finances,” Lemus said. “That’s why they come to events like this: To see how they can manage and invest the family money. It’s one of the reasons we really wanted to have the conference in Spanish.”
Bitcoin shouldn’t be reserved to the nation’s elite, but should make everyday life easier for ordinary Salvadorans, Lemus said. That concern influenced her action plan for Bitcoin Berlín. “We wanted to push back on this notion that Salvadorans don’t use Bitcoin — that only expats use it. Now, if you go to Berlín, you’ll see working class people using Bitcoin.”
Making sense of El Salvador’s situation
There was an overall feeling that El Salvador is on the cusp of entering a new phase in its Bitcoin experiment.
The last four years have seen the Central American nation, once known as the homicide capital of the world, rebrand itself into Bitcoin Country. President Nayib Bukele, by locking up MS-13 and Barrio 18 and putting an end to gang warfare, had given El Salvador a once-in-a-lifetime opportunity to reorganize itself and attain prosperity — at least that’s how most of the people at the conference seemed to see it.
A lot of conversations revolved around the pick-up in Bitcoin adoption. For years, despite bitcoin becoming legal tender in 2021, you could only pay for stuff with the cryptocurrency in El Zonte, the small surfing village also known as Bitcoin Beach. In 2023, 88% of Salvadorans did not use the digital coin, according to a survey by the Central American University.
But now a second Bitcoin circular economy has been implemented in the town of Berlín, up in the mountains, and other initiatives are reportedly growing elsewhere, like in Santa Ana, the second largest city in the country.
Martínez, Lemus and Linares were all eager to share tips and advice. The secret sauce to adoption, they said, is to mix Bitcoin initiatives with social work. “If the way to get people to use Bitcoin was to make hamburgers instead of doing social work, then I would be making hamburgers,” Linares told me. “Whatever works. People like social stuff, so that’s what we’re doing.”
Stablecoin giant Tether’s decision to relocate its headquarters to El Salvador was also perceived as a massive win. Tether reported $143.7 billion in assets, including $94.5 billion in Treasury bills, in the last financial quarter of 2024. For comparison, El Salvador’s GDP was estimated at $34 billion in 2023 by the World Bank.
Tether has become the largest company (by far) to be based in El Salvador — and other crypto firms are bound to follow in its footsteps, taking advantage of the nation’s advanced crypto regulatory framework and increasingly skilled workforce. For Salvadorans, that means more career opportunities, higher salaries and the possibility that the country may become a tech hub in its own right.
“El Salvador should not only be known for being the first to implement bitcoin as legal tender,” Darvin Otero, CEO of tiianki Technology, said on stage. “Let’s change the lives of the young folks here and create the next leaders of this tech movement.”
“We have a small territory, but we can have a big dream,” Alejandro Muñoz, a Salvadoran lawyer, said. “We can provide a big service. … Good lawyers will attract good investors and filter the scammers out. Bitcoin education needs to happen in the legal industry; steps are being taken already in that direction.”
Bright future ahead
The conference occurred only days after the government, as part of a recent multi-billion dollar deal with the IMF, rescinded bitcoin’s status as legal tender — meaning that businesses aren’t obliged to accept bitcoin payments anymore. While some members of the Bitcoin community have accused Bukele of caving to the IMF, none of the Salvadorans at Plan B seemed to see it that way. In their view, nothing has changed on a practical level, since the vast majority of businesses didn’t use Bitcoin to begin with.
In fact, a number of people welcomed the deal. “El Salvador locked in long-term funding to finish the reforms needed,” Mike Peterson, an American expatriate who lives in El Zonte and co-founded of Bitcoin Beach, posted on X recently. “The IMF loan puts the country on track to get the BBB credit rating that most sovereign wealth funds require to invest in a country.”
That’s the big difference between Salvadorans and Bitcoiners. Hardcore Bitcoiners prioritize global adoption; they want the cryptocurrency to eventually supplant government-issued currencies, like the U.S. dollar. For them, El Salvador is a stepping stone, the first nation to initiate hyperbitcoinization, but certainly not the last.
Salvadorans don’t have the same priorities. For them, Bitcoin is simply a tool, a means to an end. Their goal is to develop Salvadoran society.
“Salvadorans have always been proud of being Salvadoran. But there was a lot of pessimism. We were never the first in anything positive, only in negative things,” Linares told me. “Now people come from all parts of the world to listen to what we have to say. Bitcoin has a lot to do with that.”
“There are a lot of projects here in El Salvador that invest so much time and resources and get almost nothing in return — except tremendous pride in being able to give back to the community and support everyone else. This feeling needs to expand throughout the country. We’re in a moment of great change. You can feel it in the air.”
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El Salvador is still Bitcoin country, despite the fact that bitcoin is no longer legal tender in the country — at least from where I’m sitting.
Let’s start with some background on the matter.
On January 29, 2025, the Legislative Assembly in El Salvador voted to remove bitcoin’s status as legal tender.
This means that businesses in the country no longer have to accept bitcoin (not that this rule was ever strictly enforced while bitcoin was classified as legal currency, as far as I know; however, I have been told that big businesses that operate in the country (e.g., McDonalds, Walmart) may stop accepting bitcoin as payment now, which could have a detrimental effect on adoption).
This change occurred approximately one month after the International Monetary Fund (IMF) struck a deal with authorities in El Salvador that stipulated the following:
- El Salvador would receive a $1.4 billion loan to support the government’s “reform agenda”
- Bitcoin-related risks be mitigated; bitcoin acceptance in the private sector must be voluntary, while the public sector’s participation in Bitcoin-related activities would be “confined” (bitcoin can no longer be used to settle government debts or pay taxes)
- Operations for the government-created Bitcoin wallet, Chivo, would be “unwound”
While the news of the Salvadoran government’s reversing its policy on bitcoin as legal tender as a result of influence from the IMF feels like a gut punch even to me, someone who isn’t Salvadoran and doesn’t live in the country, I can’t help but believe that El Salvador is still Bitcoin country.
And this feeling has only grown stronger based on what I’ve seen Bitcoiners in El Salvador posting on X.
Evelyn Lemus, co-founder and Director of Education at Bitcoin Berlin, a Bitcoin circular economy within the country, doesn’t plan to stop teaching everyday Salvadorans about Bitcoin.
Just saying it out loud.
Bitcoiners will not stop teaching about Bitcoin and making the adoption happen just because Bitcoin is not legal tender anymore. This means we need to keep pushing harder and keep doing what we do
LFG
![]()
Bitcoin in the hands of peoplepic.twitter.com/hnMpJmL5c7
— Evelyn Lemus (@Evelynlemus2906) February 2, 2025
The team at Bit Driver don’t plan to change their business model — accepting bitcoin as taxi fare — any time soon.
We're still a Bitcoin a company.
— Bitdriver (@bitdriver_sv) February 2, 2025
While John Dennehy, founder of Mi Primer Bitcoin, expressed concern about the government of El Salvador’s rolling back its policy on bitcoin as legal currency, he and the ever-growing team at Mi Primer Bitcoin plan to double down on the work they’re doing.
Good morning from El Salvador!
We are now in DAY NINE since the government rescinded Bitcoin as legal tender, at the request of the IMF (effective after 90 days)
This means grassroots, independent Bitcoin education is now MORE important than ever
In response, at… pic.twitter.com/iTXdf0gAoL
— John Dennehy (@jdennehy_writes) February 7, 2025
The legendary Max and Stacy haven’t publicly voiced any plans to give up on El Salvador anytime soon.
And El Salvador’s Bitcoin Office, run by Stacy, is still stacking bitcoin and helping to run Bitcoin education programs in the country.
EL SALVADOR STACKS ANOTHER 1 BTC TO STRATEGIC RESERVE
El Salvador is still stacking.
Every day.
Total SBR Holdings: 6,071.18 BTC
Total Added Today: +1 BTC
Total Added Past 7 Days: +22 BTC
Total Added Past 30 Days: +60 BTC… pic.twitter.com/y4kv2693BX
— The Bitcoin Office (@bitcoinofficesv) February 7, 2025
The lesson here is that while the law around Bitcoin may have changed in El Salvador, the Bitcoiners on the ground in the country have hardly flinched.
Because we are Bitcoin, what matters most is that everyday Salvadorans and everyone else involved in the Bitcoin movement in El Salvador continues to push forward with the Bitcoin mission.
The IMF may have landed a blow, but Bitcoiners in El Salvador remain steadfast in their efforts to foster broader Bitcoin adoption.
El Salvador is still Bitcoin country.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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Bitcoin
El Salvador Ends Bitcoin Legal Tender Experiment—What Went Wrong?
Published
3 weeks agoon
February 6, 2025By
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El Salvador, the first country to adopt Bitcoin as legal tender in 2021, recently reversed its decision after pressure from the IMF. What led to this change, and what were the outcomes of its nearly four-year crypto experiment?
The curious case of El Salvador
The 2021 law in El Salvador made Bitcoin (BTC) legal tender, meaning it became not just legal but mandatory for transactions. Merchants were required to accept Bitcoin, and the government started collecting payments such as taxes and fees in Bitcoin.
To facilitate this, the country launched the Chivo wallet, a government-backed mobile app designed to help Salvadorans transact with Bitcoin. The app allowed users to send, receive, and store Bitcoin, and even offered an incentive of $30 in Bitcoin for those who downloaded it.
However, the law didn’t affect the status of the U.S. dollar, which had been the official currency of El Salvador from 2001 to 2021. This meant Salvadorans who didn’t want to use Bitcoin could still use USD for all transactions. Polls from 2021 showed that only 15% of the population trusted Bitcoin, and 70% of respondents opposed its adoption.
Despite President Nayib Bukele’s media campaign and public relations efforts, the law failed to convince many Salvadorans of its value.
Protesters in San Salvador set alight a Bitcoin ATM which had just been installed by the government.
The protest was called to oppose the El Savador government’s decision to make Bitcoin legal tender. pic.twitter.com/PyW2AWbkiw
— Radical Graffiti (@GraffitiRadical) September 19, 2021
While the international crypto community lauded the El Salvadoran law, the residents of the country protested the law on the streets, and many in the financial world criticized the legislation’s flaws.
One key issue was that many merchants across the country were not equipped to accept Bitcoin, and the law did not address this gap.
Furthermore, a large portion of the population lacked bank accounts, and many businesses still only accepted cash payments. Many merchants were also reluctant to accept Bitcoin due to its volatility, fearing that its fluctuating value could lead to losses.
What are the results of the El Salvador Bitcoin experiment?
The nearly four-year period during which Bitcoin was legal tender in El Salvador has yielded mostly negative results, though there are a few positives to note.
On the positive side, the 2021 Bitcoin adoption helped expose more people to cryptocurrencies. A measurable outcome was the boom in tourism. The announcement of Bitcoin’s adoption piqued international interest, leading to a 20% increase in tourist arrivals in 2024 compared to 2023, with growth also seen in previous years.
However, the broader impact has been largely negative. Bitcoin failed to serve as a hedge against inflation in El Salvador. Issues such as its extreme volatility and technical difficulties with the Chivo wallet are often cited as reasons for the public’s reluctance to use Bitcoin.
Additionally, multiple hacking incidents involving the Chivo wallet further eroded trust in the cryptocurrency, leading to its limited use.
The Bitcoin law also fell short of significantly improving financial inclusion. In 2021, approximately 70% of Salvadorans were unbanked, and an even larger percentage had never used Bitcoin.
In fact, most people in the country largely ignored the digital currency. By 2024, a report from The Central American Group indicated that 92% of Salvadorans did not use Bitcoin for transactions.
While Bitcoin was intended to facilitate cross-border payments, it had little impact in this regard. In 2023, only 1.3% of remittances were made using Bitcoin. A 2022 survey also revealed that 86% of local businesses had no Bitcoin transactions, and 91.7% of respondents said Bitcoin adoption had not affected them. Only 3.6% reported an improvement in sales.
One of the key flaws in the Bitcoin adoption strategy was the timing. The law was enacted in 2021, a year following a major crypto rally fueled by Bitcoin’s halving.
Historically, bull markets are followed by downturns, and the law was passed just before another crypto winter began. The sharp Bitcoin crash in 2022 only served to further discourage Salvadorans from using the currency.
How did the El Salvador Bitcoin experiment end?
Since 2022, the International Monetary Fund has urged El Salvador to amend its Bitcoin law. On January 30, 2025, the Salvadoran Congress took action, agreeing to revise the law in exchange for a $1.4 billion loan from the IMF.
One key condition for securing the loan was the removal of Bitcoin’s legal tender status in the country. The loan agreement stipulates that “public sector engagement in Bitcoin-related economic activities, transactions, and purchases will be limited.”
While reports suggest that Bitcoin will remain legal for trade among Salvadorans, it will no longer be accepted for taxes or other government payments, and businesses will have the right to refuse Bitcoin payments.
The requirement for all businesses to accept Bitcoin had faced stark criticism due to the BTC’s volatility and the public’s limited understanding of digital currencies. The new legislative reform also addresses these concerns by giving businesses the option to choose whether or not to accept Bitcoin
However, the full scope of these restrictions is yet to be fully determined, and further details are expected soon.
Good morning!
We are now in DAY FIVE since El Salvador rescinded Bitcoin as legal tender, at the request of the IMF
There continues to be a lot of misunderstanding about what happened on Wednesday, so it might be worth giving a brief overview
In 2021 El Salvador made history… pic.twitter.com/s6td9ju0kA
— John Dennehy (@jdennehy_writes) February 3, 2025
The IMF loan will be disbursed over a period of 40 months, meaning these restrictions will be enforced over a three-year span, potentially leading to a long-term decline in Bitcoin’s role in the country.
Despite the shift in policy to secure the IMF loan, El Salvador’s government appears to maintain its pro-crypto stance. On Feb. 4, El Salvador’s Bitcoin Office reported purchasing a total of 12 BTC through two separate transactions.
The first acquisition involved 11 BTC, purchased for approximately $1.1 million, at an average price of $101,816 per Bitcoin. The second purchase added 1 BTC at a price of $99,114, just hours later.
These recent acquisitions bring the country’s total Bitcoin reserves to 6,068 BTC, valued at over $592 million at the time of writing. El Salvador has continued to accumulate Bitcoin steadily, having added 60 BTC over the past month alone.
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