Traditionally, we note that the idea of Bitcoin being recognised as an official legal tender in the country has faced criticism from within both the financial and cryptocurrency communities under duress. In particular, the most significant statement was made by Vitalik Buterin, the creator of Etherium. He stated that this approach by the national government is inconsistent with the ideals of cryptocurrency and decentralisation in general. Accordingly, ideally, officials would do well to work on new ways to promote BTC within the state.

At the same time, some experts argue that even this situation will benefit the entire digital asset industry, as more and more countries will also recognize Bitcoin as an official means of payment in the future.

Who uses Bitcoin?

Here’s a quote from Bukele on Twitter, in which the president shared the big news. The replica was published by Cointelegraph.

People are inputting far more US dollars than they are withdrawing from Chivo crypto machines.

Which means in this case, the demand for Bitcoin is outstripping citizens' desire to hold dollars. That said, the cryptocurrency wallet is not used by everyone in the country, hence it is impossible to draw conclusions about the entire population of El Salvador. At the same time, BTC is in high demand among the more technically advanced population - at least on a 24-hour basis.

In just a day, citizens of El Salvador made more than 24 thousand currency exchange transactions worth over 3.069 million dollars. As a reminder, since Bitcoin’s legalization in early September, more than 200 crypto machines have been installed across the country. In a matter of weeks, El Salvador has become the third largest crypto-machine country in the world.

Crypto machines in El Salvador

Meanwhile, Tether, which is the issuer of USDT’s largest staplecoin, has been fined $41 million by the US Commodity Futures Trading Commission (CFTC). The reason is that the firm provided “inaccurate or confusing” evidence that its own tokens were backed by dollar reserves. As a reminder, each token must be backed by a currency reserve of the appropriate equivalent in order to support the price of Stablecoins.

Tether-linked Bitfinex was also fined $1.5 million for “illegal transactions outside the trading platform”. As noted by the CFTC, between 2016 and 2019, Tether lied about its reserves, claiming they were fully backed by USDT specifically. However, recent audits have revealed that a noticeable proportion of the reserves consist of debt. Here is a quote from the agency’s officials.

The ruling also notes that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves. Tether also falsely claimed that it would undergo regular professional audits to demonstrate that USDT is 100 per cent backed.

Stablecoin Tether

The market had almost no reaction to the news. That’s not surprising, though – the cryptosphere has long been rumoured to be troubled by Tether’s reserves. And as long as the company itself is doing well, it’s unlikely to cause a major collapse in the crypto market anytime soon. On top of that, the penalties for the companies have turned out to be paltry by current standards.

We clarified the latest data: USDT is still the main staple in the cryptocurrency market today. This coin has a market capitalisation of $72.61 billion, while the total capitalisation of stabelcoin is 128.03 billion. Circle's USDC is in second place for this indicator - it has a capitalisation of $32.81 billion.

Market Capitalisation of Stablecoins in the Cryptocurrency Market


We believe that the trend in El Salvador makes it clear that locals are increasingly willing to get involved with cryptocurrencies instead of dollars and other fiat currencies. Consequently, they are counting on the rise of coins and thus want to make money on their own investments. And because it's easy to buy BTC with a national cryptocurrency wallet, they are actively taking advantage of the opportunity. We want to believe that this trend will only strengthen in the future.

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