El Salvador: The bitcoin beach experiment

Cryptocurrency enthusiasts have travelled from across the world to El Salvador to see for themselves how the country has adopted bitcoin

A new kind of holiday money

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 Satoshi uses “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.”

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.