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One Month Of BTC: Ups And Downs Of El Salvador’s Bitcoin Adoption

One Month Of BTC: Ups And Downs Of El Salvador’s Bitcoin Adoption

Technical glitches and other issues have plagued BTC adoption among Salvadorans in the last month. Let’s see what happened in the last month of BTC as a legal tender in El Salvador. 

Controversial BTC Tender In Action

It has been a month since the Central American country of El Salvador officially adopted Bitcoin as legal tender in the country in a bid to improve the democratization of its economy. Under the leadership of President Nayib Bukele, the government also launched the Chivo wallet app and ATMs to facilitate easy transactions and withdrawals between Salvadoreans in and outside the country. The Chivo ATMs can also provide instant conversions between BTC and USD and around-the-clock money withdrawal services. 

However, in the one month that it has actually been in use, the Chivo app has been plagued by technical glitches that are proving to be a roadblock in its popularity. The landmark move by the country has been heavily discussed by several global leaders and industry experts. Ethereum co-founder Vitalik Buterin had also addressed the concerns behind the rapid officialization of the crypto, calling the move ‘reckless.’

Widespread Adoption Among Citizens

A considerable percentage of the country’s population has already dabbled with bitcoin in the past month. Remittances sent by non-resident Salvadorans via BTC amount to an average of a million dollars daily. According to President Bukele, the Chivo app has already been downloaded by 3 million people, which is half a million more than what was targeted initially. If the numbers are accurate, then that is half the country’s population. With 2.1 million active users in September, the hype behind the app had definitely reached all across the country. According to a report by the Salvadoran Foundation for Economic and Social Development (FUSADES), 12% of consumers have been using BTC. 

President Bukele tweeted, 

"Since yesterday, Salvadorans are inserting more cash to buy BTC than what they are withdrawing from the Chivo wallet ATMs. This is very surprising so early in the game."

What’s Plaguing Chivo? 

However, the initiative is still in the early stages of active usage and is experiencing some growing pains. Construction worker Adalberto Galvez, who had already had BTC experience from the experimental project, Bitcoin Beach, claimed that he had lost $220 when he tried to convert his BTC funds to cash via the Chivo app. Other users of the app have made similar claims of lost funds. Another factor of concern is the slow adoption by Salvadoran businesses. According to FUSADES, a majority of 93% of the 233 companies it studied across different sectors have reported zero BTC payments.  

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.