An investigation determined that 60% of Salvadoran citizens stopped using Chivo Wallet after acquiring the USD 30 bonus the government gave during its launch. Only 20% of the entities in the country accept Bitcoin.
Even though Bitcoin got recognized as legal tender in El Salvador almost one year ago, the flagship digital asset is still far from becoming the most used exchange alternative among Salvadoran citizens.
Recent research revealed by the National Bureau of Economic Research (NBER) of the United States of America brought some information regarding the status of adoption of Bitcoin in the Central American nation, and the widespread use of Chivo Wallet, the digital Wallet encouraged by the national government to boost the use of Bitcoin.
The research determined that few citizens have used Chivo Wallet recently. Specifically, its use decreased since the government gave away the bonus of USD 30 in BTC for users who downloaded the app.
The study highlighted that among those who have downloaded the app, more than 60% did not carry out activities in Chivo Wallet after spending their $30 bonus. In addition, most users who used Chivo after paying the $30 bonus do not use the application constantly.
Use of Chivo Crumbled down after Bonus Distribution
Although at least 70% of the Salvadoran population knows about the existence of the Bitcoin wallet encouraged by the government, and among them, 78% claim to have tried to download it, the use of the application still seems to be scarce and to have decreased significantly.
According to the research, most wallet app downloads coincided with the $30 bonus promotion, with no downloads detected in 2022.
At the same time, the investigation maintains that it found “no evidence that the Chivo app served to pay taxes or send remittances on any significant scale,” both of which are widely encouraged by the Salvadoran administration. It also explained that 75% of Salvadorans in the survey would never have used the app.
Intending more general adoption of Bitcoin, the NBER researchers determined that cash is still the most widely used payment procedure in the nation. More than 50% of citizens use only cash to pay their expenses. Also, more than 70% of those surveyed are unbanked people, and almost 90% of them do not use mobile banking.
Although, the study determined that the use of Chivo Wallet could crumble down in front of other payment procedures. Citizens who downloaded the application lowered their use of cash by 10%, while their net use of debit cards crumbled down by 11%.
Salvadoran Companies have not Accepted Bitcoin Either
Despite what other reports contend, the NBER investigation finds that cryptocurrency has not been widely adopted by businesses either. While almost all companies accept cash as payment, only 20% of them accept Bitcoin. Of the few digital currency sales, only 4.9%got paid through Chivo Wallet.
As far as the companies that receive digital currency are concerned, most companies do not hold coins in BTC. 71% of Bitcoin sales get transformed into dollars and then withdrawn in cash, 17% get converted into dollars and housed in the Chivo Wallet, and only 12% got housed as Bitcoin within the Chivo app.
By: Jenson Nuñez
