More and more developing countries are turning to digital currencies as a last-ditch hope to stabilize and improve their economies. What do the cases of El Salvador, Bolivia, and Zimbabwe tell us?
When institutions lose their compass and money loses its value, some countries seek salvation in places no one would have imagined just a few years ago—in cryptocurrencies. El Salvador, Bolivia, and Zimbabwe are three radical examples of using cryptocurrencies and digital tokens to deal with macroeconomic failure. In all three countries, crypto is an attempt to restore control, trust, or at least daily stability.
Cryptocurrencies lie ideologically halfway between democracy and anarchy. The idea is enticing: to take power away from central banks and hand it to the “algorithm of the people,” to put an end to printing unbacked money, political manipulation, and crises paid for by those who didn’t cause them. But the practice is far less romantic. Without trust, institutions, and the rule of law, crypto can only cause harm.
El Salvador: Bitcoin as a National Currency
Until a few years ago, El Salvador was considered the most dangerous country in the world by homicide rate. When Nayib Bukele came to power in 2019, he launched a crackdown on crime alongside a digital revolution. In 2021, El Salvador became the first and only country to adopt bitcoin (BTC) as an official currency. In a country where violence had long been the dominant “currency,” the government tried to regain citizens’ trust through algorithms.
The goal was ambitious: drastically reduce remittance fees from the diaspora (which make up 25% of GDP), attract digital nomads, and show that a small country could defy the U.S., the IMF, and the status quo. Citizens were legally required to install the Chivo wallet and use BTC for domestic payments.
But the citizens didn’t trust bitcoin—or Bukele’s populist government. Less than 3% of trade occurred in BTC, crypto remittances made up only 2% of the total, the infrastructure was unprepared (leading to system crashes and theft), and the currency’s volatility added further instability. On top of all that, the state relinquished control over its own money—and thus over its sovereignty.
The experiment ended quietly and ingloriously. In early 2024, under IMF pressure, El Salvador amended its law and effectively abandoned crypto as a national currency, reverting to the U.S. dollar.
Still, the risk hasn’t fully disappeared. The government continues to hold more than 6,000 bitcoins worth around $650 million, representing 16% of its foreign currency reserves. The World Bank and IMF have labeled this extremely risky and irresponsible experimentation with public finances.
Bolivia: Crypto as an Exit Route
In Bolivia, crypto became a Plan B for ordinary people because the economy spun out of government control. Until 2023, it was even illegal to possess cryptocurrencies, but when inflation jumped to 24%—the highest rate in three decades—citizens began seeking an exit on their own. Instead of trading and saving in bolivianos, more and more people fled to crypto, especially to stablecoins like Tether (pegged 1:1 to the U.S. dollar).
“In early 2024, El Salvador amended its law under IMF pressure, effectively abandoning crypto as a national currency and reverting to the U.S. dollar.”
According to the latest data from the Central Bank of Bolivia, the volume of regular daily transactions via cryptocurrencies increased by over 500% in the past year, reaching $300 million in the first half of 2025. That’s $25 in crypto transactions per capita—a surprisingly high figure for an underdeveloped country.
In Bolivia’s case, crypto cannot help the state tackle high inflation, unemployment, or reduce public debt. People turned to the crypto world to survive—because the state has no plan. Instead of strengthening Bolivia, this trend may weaken it further in the long run by opening the door to tax evasion, shadow financing, and crime.
Zimbabwe: Digital Gold
Zimbabwe is today’s monetary laboratory—a country that changes currencies frantically instead of undertaking real monetary reform. Just a few years ago, people carried cash in gym bags to buy bread—similar to what happened in the Balkans in 1994. The local currency has long been synonymous with chaos, or “funny money” from the days of rampant hyperinflation.
In a desperate attempt to salvage what can still be saved, Zimbabwe’s central bank launched yet another experiment: a digital token backed by gold, called ZiG (short for Zimbabwe Gold). It was declared the official national currency in April 2024.
Technically, the ZiG token is not a cryptocurrency—it doesn’t use blockchain, isn’t mined, and is entirely state-controlled. But the idea is clear: when citizens no longer trust paper or numbers, the government hopes they might trust gold, at least in digital token form.
Skeptics see this as a desperate attempt to restore lost monetary power. It’s yet another fresh start with no substance—because it’s hard to build trade on gold when you don’t have a functioning market—or possibly even the gold itself.
As unbelievable as it may sound, Zimbabwe is not alone. More and more developing countries are turning to digital currencies as a last hope to stabilize and improve their economies—such as Nigeria and Venezuela.
The message is clear: digitalization and crypto cannot pull a country out of crisis. They are merely tools to enhance an already functional system. Unlike countries that use digital money out of necessity, more developed nations see it as a strategic step toward a more efficient future. That’s where Central Bank Digital Currency (CBDC) comes in—already in the early stages in dozens of countries, from Serbia and Sweden to China.
About the Author
