Poll shows El Salvador’s failure in Bitcoin experiment

Over several months, the adoption of the first cryptocurrency in El Salvador has not gained mass traction. This is evidenced by data from a representative опроса by the American National Bureau of Economic Research.

The came into force on September 7, 2021 law recognizing Bitcoin as an official means of payment in the country has been in effect since then. Citizens gained access to the government-backed cryptocurrency wallet Chivo.

The a signup bonus of $30 is cited as a factor in the adoption data; 60% of those who downloaded the app did not use it after receiving the bonus.

95% of users have never paid taxes in cryptocurrency via Chivo, and 89% did not receive transfers through the app.

More than half of citizens did not use Chivo ATMs.

Although authorities mandated businesses to accept payments in Bitcoin, only 20% of firms added such an option. Of those that did, 88% prefer to convert the funds into dollars. 12% of such companies hold cryptocurrency.

We have documented that, despite the government’s “big push” and a significant share of people downloading Chivo, the use of Bitcoin for everyday transactions is small and concentrated among educated, young, and male populations with access to banking services,

No other country has yet followed El Salvador’s lead in legalising cryptocurrency. However, in neighbouring Honduras, the Próspera economic zone authorities recognized Bitcoin as a legal tender.

The IMF has repeatedly criticised El Salvador’s decision. In January, the institution recommended stripping Bitcoin of legal tender status.

In April, former central bank head Carlos Acevedo stated that the legalization of cryptocurrency “killed” El Salvador’s relationship with the Fund.