It’s 2pm on an overcast September afternoon in the Central American city of San Salvador and Matt Morris is halfway through a three-hour walking tour.
Beads of sweat drip down his face as the tour guide ushers the small group from El Rosario church, known for its colourful stained-glass windows that create a rainbow inside the belly of the building, past bustling cafés filled with locals drinking strong coffee and bottles of beer.
As the tour draws to a close, it is time to pay. But while the other tourists pat down their pockets, hunting for cash, Morris whips out his phone. “Do you take bitcoin?” he asks.
El Salvador made history in 2021 when it became the first country to make the cryptocurrency bitcoin legal tender. Since then, its 6.3 million citizens have been able to pay for goods and services, receive payments and even settle tax bills in bitcoin.
Matt Morris went to El Salvador and used bitcoin
MATT MORRIS
It is a digital currency — there are no physical notes or coins. Instead, your money is stored in a digital wallet that allows users to send and receive payments without the need for a third party, like a bank. The wallet is stored on a blockchain, a type of digital ledger that keeps track of who owns which coins and which transactions are made.
Nayib Bukele, El Salvador’s populist president, said that embracing bitcoin would “improve lives and the future of millions” by making it easier to access financial services, while boosting economic development and increasing investment into the country. Plans for a $1.6 billion “bitcoin city”, a cryptocurrency trading hub powered by geothermal energy from a volcano, were drawn up, and citizens were given $30 of bitcoin to encourage them to sign up to use the national Chivo Wallet.
Cryptocurrency enthusiasts, including Morris, have travelled from across the world to El Salvador to see for themselves how the country has adopted bitcoin.Morris, 47, who works in PR, has been investing in cryptocurrency since 2016, when a quick drink with a friend turned into a six-hour discussion about the future of digital currencies.
“Before that, I thought digital money was nonsense and I didn’t bother looking into it,” he said. “But then I had a lightbulb moment where everything clicked, and I finally got what it all meant.”
He bought half a bitcoin for £451 in 2016, and it is now worth about £26,000 — a potential profit of 5,800 per cent. “I’ve wanted to go to El Salvador for ages to use bitcoin,” Morris said. “Some people think that making it legal tender is an absolute disaster and stupid because bitcoin is a farce, and others think it’s brilliant and revolutionary. I wanted to find out for myself what it was like.”
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As well as El Salvador, the Central African Republic announced in 2022 that it would recognise bitcoin as legal tender. You can still spend it in many other countries, including the UK, although companies do not legally have to accept this method of payment. There are 11 countries where cryptocurrencies are banned as a method of payment, including Russia, China and Vietnam.
To pay using cryptocurrency you have to download a digital wallet to your computer or phone. Before his trip to El Salvador, Morris bought £30 worth of bitcoin — equivalent to about 0.00058 bitcoin, or roughly 60,000 satoshis (there are 100 million satoshis in one bitcoin) — paying a £1.49 transaction fee to convert his sterling.
He downloaded the Wallet of Satoshi app to store his bitcoin in. The Wallet of Satoshiuses “lightning” tech, which means that it is connected to an ultra-fast network and payments are made in seconds.
“After that, you can just go up to a counter, order a coffee, and ask to pay in bitcoin,” Morris said. “They load a QR code on the till, which I scanned using my Wallet of Satoshi app. The app tells you how much your coffee is worth in bitcoin, and then you tap the ‘OK’ button. There’s a ping, and the payment is instantaneous.”
A bitcoin ATM in El Zonte
MATT MORRIS
There are more than 200 bitcoin ATMs around El Salvador, and Morris used one to buy an extra £20 worth while he was there. For a 2 per cent fee, you can use cash or a credit card to buy the cryptocurrency. A QR code appears on the ATM screen which you scan with your app to verify the transaction and load bitcoin to your digital wallet. “The whole process takes 30 seconds, and is very easy,” Morris said.
Check the country’s rules before you do this. In the UK crypto ATMs are legal, but only if the operator is registered with the Financial Conduct Authority (FCA), the City regulator. There are no registered operators at present, which means that any crypto ATM in action is illegal. Last month at Westminster magistrates’ court Olumide Osunkoya of London admitted five charges of unlawfully running multiple cryptocurrency ATMs in a case brought by the FCA.
In total, Morris spent £50 worth of bitcoin on his trip, using it to pay for drinks and food in cafés and bars, for excursions, and a packet of coffee from a plantation he visited.
Coffee and cake bought in El Tunco with bitcoin
MATT MORRIS
Has bitcoin saved El Salvador?
Salvadorans say that the introduction of bitcoin has helped to boost tourism. In 2023, 2.5 million tourists visited the country, up 35 per cent from 1.8 million in 2019.
“We are definitely seeing an increase in tourism in El Salvador,” said Matt Schaprio, who owns a hotel in El Zonte, which is sometimes known as Bitcoin Beach. “Over the past 20 years, you would usually see younger backpackers but since bitcoin’s introduction you are starting to see families, and a lot of those families are bitcoin-focused or are bitcoiners.”
But despite the fanfare, just 7.5 per cent of the population uses bitcoin to pay for goods and services, according to a study by Francisco Gavidia University in San Salvador. While there are bitcoin hotspots in the big cities and coastal areas popular with tourists and surfers, its usage remains rare across large parts of the country.
“Bitcoin has been entirely unsuccessful,” said Pete Howson, an assistant professor at Northumbria University. “When the El Salvador government gave away $30 of bitcoin to each person, most used a bitcoin ATM to withdraw them as dollars and never used the system again.
“Bitcoin is massively volatile and there is no protection. The poorest people in Latin America are being told by officials that this is a worthwhile form of investment when the opposite is true.”
Morris agrees that El Salvador has a long way to go to fully embrace crypto. “People prefer dollars,” he said. “Cash is still king, and the price of items is not usually listed in bitcoin, so unless you have an app to hand, you can’t work out how much everything costs. People prefer paying with a $5 bill instead of messing around with an app. I don’t think it will ever be the main way that people pay.”
After his walking tour, Morris tips his tour guide 22,463 satoshis, or 0.00022 bitcoin — equivalent to $15. He stops for a $2 coffee, paying 4,788 satoshis, and plans a tour to a nearby coffee plantation which costs $40, but which he will pay for on the day using bitcoin.
Should you invest in bitcoin?
Some 40 per cent of cryptocurrency buyers did it as a gamble, according to research by the FCA. Some 30 per cent bought it as an investment and just 10 per cent to make purchases.
Investing comes with significant risks. Cryptocurrency is extremely volatile so prices can go up and down quickly. While substantial gains can be made, the losses can be just as significant and you could even lose all your money.
The sale of cryptocurrency is not regulated in the UK, which means that your investment is not protected by the Financial Services Compensation Scheme, which covers up to £85,000 held with an authorised investment firm if it goes bust.