Abstract

The increasing popularity of Bitcoin has had a significant impact on regulatory policies and national currency systems across the globe. In recent years, El Salvador, and the Central African Republic (CAR) have passed legislation to adopt Bitcoin as their national currency. This study examines the reasons behind the retention of this legislation in El Salvador and its repeal in the Central African Republic. The study is focused on answering the question: How did different regulatory approaches affect domestic innovation in El Salvador and the Central African Republic? To answer this question, four hypotheses were formulated to explore whether greater instances of corruption/ illegitimacy will lead to a lack of regulatory order or a lack of domestic innovation in each case. This study utilizes Mill’s (1843) Method of Difference to compare El Salvador and the Central African Republic, which share many similarities. The analysis creates variables from the literature and various database sources, including Transparency International’s Corruption Perceptions Index (CPI) 2022, The World Bank’s DataBank Worldwide Governance Indicator (WGI) 2023, and The Fragile States Index’s State Legitimacy Global Data Index (SLGDI) 2023 databases. The study aims to provide an in-depth understanding of the similarities and differences between these two countries and their respective governance structures by utilizing a coding system to translate quantitative information into qualitative results, providing insight into two cases. The findings partially confirm that corruption and illegitimacy may contribute to a lack of regulatory order. However, the findings rejected corruption and illegitimacy’s effects on domestic innovation, as the actual level exceeded initial projections in both cases. This research sheds light on the complex relationship between regulatory policy, corruption, illegitimacy, and domestic innovation in the context of Bitcoin adoption by sovereign nations.

Advisor

Wrobel, Megan

Department

Political Science

Disciplines

African Studies | Banking and Finance Law | Business Law, Public Responsibility, and Ethics | Comparative and Foreign Law | Comparative Literature | Comparative Politics | Consumer Protection Law | Economic History | Economic Policy | Finance | International Business | International Economics | Latin American Studies | Legal Writing and Research | Other Legal Studies | Political Economy | Political Science | Public Affairs, Public Policy and Public Administration | Public Policy | Strategic Management Policy | Translation Studies

Publication Date

2024

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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