After the initial boom due to the novelty, $30 in BTC was distributed freely by the government, Bitcoin usage in El Salvador does not appear to be taking off.
Bitcoin usage decreased in El Salvador
According to what appeared a report Recently published by the National Bureau of Economic Research (NBER) in Cambridge, Massachusetts, Bitcoin use in El Salvador for daily transactions remains low and concentrated in Educated, young people and already users of traditional banking.
Researchers Fernando E. Alvarez, David Argent and Diana Van Patten She interviewed 1,800 families in El Salvador, and found that only 20% say they use the state-owned Chivo wallet. Of those, only 10% said they had used less cash or debit and credit cards since using them.
The state in total has approx 6.8 million peopleso it can be estimated that Chivo is actually used by much less than 1.5 million Salvadorans.
According to the report, there is not even evidence of widespread use of Chivo to pay taxes or to send remittances from abroad, so much so that an image that emerged reveals that most users downloaded it last year. To raise $30 of state-provided bitcoinThen stop using it.
In fact, 40% of all app downloads occurred in September of last year, the date of its launch. While there are no reports that any of them will be implemented in 2022.
However, there is no information regarding the possible use of other Bitcoin wallets, but Chivo appears to be the most used in the country.
Bitcoin and El Salvador companies
In addition, the report also reveals that only 20% of companies say they have accepted Bitcoin as a payment method, as those without the equipment to do so are free to not accept it.
As revealed by NBER, on average, only 4.9% of all sales are paid in bitcoin, and 88% of companies instantly exchange BTC into dollars when they receive it. In other words, there are very few bitcoins collected that are kept in the wallet.
Usage related problems
One of the main reasons Salvadorans use so little bitcoin is that many still prefer cash. Moreover, many still do not trust Bitcoin or the Chivo wallet.
There seems to be another problem related to the use of technology especially Internet connection qualityThis makes it difficult to deploy these technologies, especially in less densely populated areas of the country.
To this we must certainly add the sharp drop in attractiveness Bitcoin due to depreciation in recent months.
For example, on Google, the peak of interest in Bitcoin occurred in El Salvador In June of last yearAnd When it was launched news of adoption as legal tender.
The second peak was in September, with the law going into effect, and interest remained high until mid-October.
But starting in November, when the rate stopped rising, interest dropped dramatically, and it continued to fall in the following months as well.
When it became legal tender, the price of BTC was around $46,000, rising to $69,000 in early November. Now it’s about $40,000, This certainly dampened a lot of enthusiasm.
And it’s hard for the great interest in him to come back soon if worth Not going back up.