Making Bitcoin Legal Tender: Lessons from El Salvador’s Bitcoin Law for India and the United States

Abstract

As the global expansion of cryptocurrencies, particularly Bitcoin, continues, the quest for identifying the most effective approach to establish them as legal tender is a significant challenge for numerous countries. El Salvador's recent enactment of the Bitcoin Law, which made Bitcoin legal tender, has led to mixed responses from the populace. As economic powerhouses like India and the United States are trending toward a similar path, a question remains unanswered: What is the most optimal way to make cryptocurrencies, such as Bitcoin, legal tender in these nations? By analyzing El Salvador's experience, this research tries to identify crucial components of the Bitcoin Law and its reception that can guide India and the United States in formulating policies. The study evaluates the existing legal frameworks in both countries and suggests necessary changes to help Bitcoin be accepted as a formal medium of exchange. Additionally, economic and social barriers, including financial stability and digital literacy, are examined to ensure they are acknowledged before adopting Bitcoin as an official currency. This research hopes to provide an unbiased consensus on the most optimal path to establish Bitcoin as a legal tender.