El Salvador: an analysis of the monetary integration law and the bitcoin law

Abstract

The objective of this article is to analyze the two most important monetary laws
that have been implemented in El Salvador, namely the Monetary Integration Law (MIL)
and the Bitcoin Law. The most important articles of both laws will be analyzed, as well as
the consequences of dollarization, and the possible advantages and risks associated with the
adoption of Bitcoin as legal tender. Although this measure may have some positive aspects
by encouraging financial innovation and facilitating remittances, the macroeconomic risk
is very high due to the volatility of this cryptocurrency. So far no positive results have been 
achieved as the acceptance has been very low and there has been a depreciation of the asset
in recent months.

JEL Classification: E40; E42; E44; E52; E58.