Crypto glossary
Legal tender (bitcoin as legal tender)
Legal tender is money that must be accepted to settle debts; El Salvador and the Central African Republic gave bitcoin that status, then backtracked.
A currency is legal tender when the law says creditors must accept it as payment of a debt, and usually for taxes. It is a narrower idea than simply being legal to use: in most countries crypto is lawful to own and spend, but no one is obliged to take it. Legal tender status also tends to simplify tax treatment, because paying with it does not create a capital gain.
El Salvador made bitcoin legal tender in September 2021, alongside the US dollar, launched the state Chivo wallet and started buying bitcoin for its treasury. The Central African Republic followed in April 2022. Adoption by ordinary people stayed limited, and both experiments drew criticism from the IMF and the World Bank.
The Central African Republic reversed course in 2023. In early 2025, as part of an IMF loan agreement, El Salvador amended its law so businesses are no longer required to accept bitcoin, ending mandatory acceptance while the government kept its bitcoin holdings. The cases show how hard it is to impose a volatile asset as everyday money.
Example
Under El Salvador's original 2021 law, a shop in San Salvador had to accept bitcoin if a customer offered it, even though most shoppers still paid in dollars.