Why trust in national currencies is weakening

The modern financial system is showing signs of strain. Governments continue to expand debt, central banks increase the money supply, and inflation is no longer viewed as a short-term event. As a result, the purchasing power of national currencies is declining, including in developed economies, and money is less reliable as a store of value.

Trade wars, sanctions, and geopolitical conflicts add to the problem. Currencies are increasingly used as political tools. Assets can be frozen, payment systems can be restricted, and capital controls can be introduced. This affects trust in money itself, because value and access can depend not only on economic factors, but also on external decisions and conflicts.

In these conditions, more countries, companies, and individuals are looking for alternatives. This is not about abandoning fiat currencies entirely. It is about using instruments that are less vulnerable to political pressure and easier to use across borders.

Can Bitcoin become a national currency?

In theory, Bitcoin has several features that make it a strong candidate for use as money. Supply is limited and set by the protocol, which removes the option of uncontrolled issuance. Bitcoin is not tied to any state and cannot be directly used as a political instrument, and transactions can be completed without intermediaries such as banks or payment systems.

In this context, Bitcoin can be viewed as money with clear and transparent rules. There is no manual government control and no single decision that can change supply or trigger issuance. For countries facing chronic inflation or heavy dependence on foreign currencies, this point matters. Bitcoin offers an alternative that is harder to restrict through the banking system and cannot be eliminated by a single decree.

In practice, however, this is a question of ideology, but practical use. A national currency must work in everyday life. It needs to be usable for routine payments such as transport, groceries, services, and taxes. Payments also need to be fast, convenient, and predictable. That is why real-world results matter more than slogans. The most visible test case is El Salvador, which tried to integrate Bitcoin into the economy at the national level.

The El Salvador experiment

El Salvador was the first country to attempt to move Bitcoin beyond an investment asset and into the national economy. In 2021, BTC was granted legal tender status, and the government launched an initiative tied to financial inclusion, investment inflows, and reduced reliance on the U.S. dollar. The most ambitious part of the plan was Bitcoin City, a proposed project with a circular economy built around geothermal-powered mining and a tax model that excluded most taxes except VAT.

In practice, adoption did not become widespread. Even with government support and a national payment app, many residents continued using the dollar, and many businesses accepted BTC mainly to comply with the rules. Volatility, limited payment infrastructure, and established habits around fiat money remained major barriers to everyday use.

El Salvador’s experience showed that a political decision alone is not enough to make Bitcoin function as day-to-day money. Even with state backing, a currency needs practical usability, predictable value in the short term, and broad acceptance. That does not end the discussion, but it sets a clear bar for what national-level adoption would require.

Bitcoin-based solutions

Bitcoin was designed as a base layer that prioritizes security, decentralization, and resistance to censorship. Its strength is predictability and resilience, not transaction speed or everyday convenience. Because of this, using Bitcoin’s base layer directly as a national currency faces clear practical limits.

A more realistic approach involves Bitcoin-based Layer 2 solutions, most notably the Lightning Network. These systems allow fast and low-cost payments without placing additional load on the main network, while still relying on its security. In this structure, Bitcoin acts as a financial foundation, while most transactions occur on secondary layers. This is similar to how modern payment systems operate on top of central settlement infrastructure, but without centralized control.

For states, this model may be more workable. Bitcoin can serve as a neutral base, with payment and financial services built on top of it for everyday economy. In this role, BTC does not need to fully replace a national currency. It can function as a settlement layer, a reserve asset, or the backbone of a digital payment system.

The evolution of money

Bitcoin is unlikely to become a national currency in the traditional sense in the near future. The experience of El Salvador showed that legal status and political support alone are not enough. For everyday use, money must be convenient, stable in the short term, and familiar to users.

At the same time, Bitcoin has already established itself as a neutral and independent financial asset. Its most likely path is not as a direct substitute for fiat currencies, but as a foundation for new models built through Layer 2 solutions, hybrid systems, and supporting infrastructure. In this form, Bitcoin could become part of future national financial systems, even without formally being designated as a national currency.