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Bitcoin Struggles to Take off in El Salvador

  • El Salvador became the first country in the world to make Bitcoin a legal tender last year, but recent research shows a lack of interest in Bitcoin from most of the nation’s citizens. 
  • Despite pressure from El Salvador’s flamboyant president Nayib Bukele on local businesses to accept bitcoin as a payment option, if technically possible, it’s rarely ever used in everyday transactions.

A research team consisting of Diana Van Patten, Fernando Alvarez and David Argente claimed to have spoken to nearly 2000 households and found that the type of people using bitcoin on a daily basis were largely affluent, young, and highly educated males.

The citizens of the small, poverty-stricken Central American country caused a system crash when the Chivo app became available last year, with the servers being overloaded for a few day⁠—but this enthusiasm didn’t last long. Much of El Salvador’s population spent the initial 30$ bonus offered, and then completely forgot about the app. At the present time, only 1 in 5 registered users still operate the Chivo app on a regular basis.

The same tendency applies to local businesses⁠—Just 1 out of 5 local businesses announced Bitcoin as an available payment method. Only American chain corporations such as McDonald’s and Starbucks reported they had had no issues with accepting bitcoin from their customers.

Despite assurances from the local government that the use of the app would dramatically reduce cash and credit card spending, only 1 out of 10 respondents claimed to have reduced cash & card expenses. Initially, one of the main goals for Chivo was to use the Bitcoin-powered app to pay taxes and receive wages, but those turned out to be extremely rare use cases in practice.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Author

Tadas Klimasevskis is a blockchain journalist and content creator, focusing on the latest tendencies of the crypto world and digging deeper into specific innovations like music NFTs, gaming NFTs and Metaverse. Vast experience in social media lets Tadas quickly spot what’s going on in the crypto industry and deliver a story with a unique spin.