Bitcoin News Today: El Salvador’s $760M Bitcoin Reserve Fails to Curb Rising Costs, NGO Warns

El Salvador’s adoption of Bitcoin as legal tender has ignited a contentious debate over its impact on economic stability and public welfare. The government has positioned the cryptocurrency as a tool for financial inclusion and a hedge against traditional currency risks, using profits from its $760 million Bitcoin reserves to fund social development projects such as infrastructure, education, and healthcare [1]. However, a senior NGO executive has criticized the policy, arguing that the benefits have not materialized for ordinary citizens. They highlighted rising living costs, stagnant wages, and limited access to digital infrastructure as evidence that the initiative has failed to deliver tangible economic improvements [1]. This divergence between official narratives and civil society critiques has placed El Salvador’s cryptocurrency experiment under global scrutiny.

The government’s rationale for Bitcoin integration hinges on its potential to insulate the economy from inflation and foreign exchange volatility. Officials point to the accumulation of reserves as a sign of success, particularly in a country historically vulnerable to currency fluctuations [2]. Proponents argue that digital assets offer a pathway to financial sovereignty, bypassing reliance on traditional banking systems. However, the NGO leader countered that the volatility inherent in Bitcoin—combined with high transaction costs and uneven digital access—has created barriers for low-income households. Rural areas, in particular, face challenges such as limited internet connectivity, which hinders participation in the digital economy [1].

The International Monetary Fund (IMF) has acknowledged that El Salvador’s Bitcoin holdings remain within the parameters of its financial program, noting no immediate risks to fiscal stability [2]. Yet the organization has not conducted a detailed assessment of the policy’s social impact, leaving room for criticism that the focus on reserve growth overlooks structural inequalities. The NGO executive called for independent evaluations to ensure that Bitcoin initiatives align with public welfare rather than speculative gains. “The government must prioritize the needs of its citizens over political symbolism,” they stated, emphasizing the need for equitable access to financial tools [1].

The debate reflects broader questions about the role of cryptocurrencies in state governance. While El Salvador’s experiment is unprecedented, its outcomes could influence global adoption strategies. Critics warn that without robust safeguards, technological advancements may exacerbate existing disparities rather than address them. The government’s emphasis on macroeconomic metrics contrasts with the NGO’s focus on microeconomic realities, underscoring the complexity of measuring success in this context. As the policy’s long-term effects remain uncertain, the outcome may serve as a cautionary tale or a model for other nations navigating the intersection of digital assets and public policy.

Sources:

[1] [El Salvador's Bitcoin reserve fails to help the average citizen — NGO exec](https://www.netizen.page/search/label/Artificial%20Intelligence)

[2] [IMF says El Salvador's Bitcoin accumulation remains within programme limits](https://www.intellinews.com/kosovo/)