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Bitcoin as a Legal Tender

Author

Listed:
  • Daehan Kim

    (Republic of Korea Army 22nd Division)

  • Jing (Maggie) Chen

    (Cardiff University)

  • Doojin Ryu

    (Sungkyunkwan University)

  • Robert I. Webb

    (University of Virginia)

Abstract

This study examines the viability of Bitcoin as legal tender with particular emphasis on the experience of El Salvador. In particular, we examine the challenges, benefits, and costs, of using Bitcoin as legal tender in a country. Our analysis underscores the significant costs of using Bitcoin to process routine transactions. These costs, both temporal and financial, form a considerable barrier to Bitcoin’s widespread adoption and use as legal tender. Given the uncertain impacts that the successful adoption of Bitcoin may cause, we suggest that there is little reason for policymakers to actively drive Bitcoin adoption.

Suggested Citation

  • Daehan Kim & Jing (Maggie) Chen & Doojin Ryu & Robert I. Webb, 2025. "Bitcoin as a Legal Tender," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 32(4), pages 1175-1188, December.
    • Handle: RePEc:kap:apfinm:v:32:y:2025:i:4:d:10.1007_s10690-024-09499-y
    DOI: 10.1007/s10690-024-09499-y
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    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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