El Salvador’s Bitcoin Adoption Is Yet to Capture the Local’s Interest (Study)
According to the American non-profit organization – the National Bureau of Economic Research (NBER) – the majority of El Salvadorans (60%) have not downloaded the Chivo Wallet (a feature that facilitates bitcoin transactions). Additionally, there have been almost no downloads since September 2021, when the country became the first nation to adopt the asset as legal tender.
Bitcoin Adoption in El Salvador Not Progressing
Last year, the Central American state made the headlines when it became the first to embrace bitcoin as an official payment method inside its borders. Despite the enthusiasm surrounding the news, the initiative did not receive a warm welcome from all El Salvadorans. Some even took to the streets, protesting against the government’s decision.
The recent study conducted by the NBER revealed that most locals remain rather negative towards the bitcoin adoption. The research stated that 68% of the country’s residents are aware of the existence of Chivo Wallet, but only 40% have downloaded it. Moreover, almost all downloads occurred in September last year (shortly after El Salvador officially recognized the primary cryptocurrency as legal tender).
The NBER further estimated that 75% of the respondents with Chivo Wallet accounts would not have downloaded it without the $30 worth of BTC, which every citizen receives when signing up.
“While most respondents spent their $30 bonus, less than half of those who downloaded Chivo Wallet continued to use it after spending the bonus – 20% of all respondents. Furthermore, most users who used Chivo after spending the $30 bonus do not engage with the app intensively,” the organization claimed.
Subsequently, the NBER argued that adopting bitcoin as legal tender might have had some positive impact on El Salvador, but the digital asset remains largely not embraced by the locals:
“Overall, despite the legal tender status of bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador.”
Bitcoin’s Benefits to El Salvador
Even though a huge chunk of the locals has still not embraced the asset, it is worth mentioning that BTC has provided certain benefits to the nation.
For one, shortly after the decision to accept it as legal tender, the global Google searches with the name of the small Central American country surged to a new yearly high.
Apart from showing virtual interest in the nation, people started visiting it more than before. Earlier this year, El Salvador’s Minister of Tourism – Morena Valdez – noted that the inflow of tourists had increased by more than 30% since the adoption of BTC.
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