Perceptions of Bitcoin adoption and its socio-economic implications: financial inclusion, social trust and governance in El Salvador

Purpose – This study examines Salvadorans’ perceptions of the Bitcoin Law, which made Bitcoin legal tender on September 7, 2021. Design/methodology/approach – We administer a survey in El Salvador and analyze the data using, among other methods, OLS regressions, ordered logit and ordered probit models. Findings – We find that Salvadorans distrust the Bitcoin Law, view it negatively, and became less favorable toward it after implementation. This sentiment is stronger among females, the more educated and conservatives, highlighting the role of socio-economic demographics. Interestingly, Bitcoin users distrust the law but not Bitcoin itself. The negative perception among those who claim to be knowledgeable about the currency, have used Bitcoin, and are more educated represents a paradox suggesting the distrust may be founded with the government rather than the Bitcoin currency itself. Practical implications – As the first country to mandate a cryptocurrency as legal tender, El Salvador’s experience, with low financial inclusion and institutional distrust, offer valuable lessons for policymakers in countries like Paraguay, Argentina, Nigeria and Brazil, where debates over digital currency adoption are ongoing. Our findings therefore extend beyond a single-country case, highlighting socio-economic challenges that may accompany similar reforms elsewhere. Originality/value – To our knowledge, no empirical study has investigated Salvadorans’ trust and perception of the new Bitcoin Law and the cryptocurrency itself, particularly regarding socio-economic factors and how perceptions have evolved since its introduction.