Despite the increase in the number of remittances to El Salvador in cryptocurrencies, it still represents less than 2%. The Central Reserve Bank (BCR) indicated that until the end of June, shipments to El Salvador in cryptocurrency wallets represented 1.88%.
In the first 10 months of the adoption of Bitcoin as legal tender in El Salvador (September 2021 to June 2022), 120.46 million dollars of remittances have entered the country through cryptocurrency wallets, according to the latest data from the Central Bank Reserve (BCR).
Although remittances increase month after month, they represent less than 2% of total remittances to El Salvador from abroad, particularly from the United States. Previously, President Nayib Bukele argued that the country paid an average of 400 million dollars a year in commissions for remittances:
“Our people pay 400 million dollars a year in fees for remittances. That saving alone will be a huge benefit for our people (or at least for those who want it). There is also the advantage of not having to carry cash. Safer and more practical”.
In May, the BCR explained that remittances to the country amounted to 5,072.09 million dollars and that only 1.9% of transfers were through cryptocurrencies, which at that time were 96.3 million dollars, 24.16 million dollars less.
Weeks ago, the president of El Salvador, Nayib Bukele, stated that the country’s inclusion in the ranking of the World Tourism Organization, along with 14 other countries, is mainly due to the adoption of Bitcoin as legal tender, the promotion of sports such as surfing, and even fighting gangs.
“Only a handful of countries have been able to bring their tourism back to pre-pandemic levels. And that is international tourism, so the reasons behind it are mainly #Bitcoin and surfing. But domestic tourism is growing even more, mainly due to our crackdown on gangs,” Bukele further claimed.
Since remittances increase in total, the percentage in cryptocurrencies remains the same or is less than 2%. According to EFE, until the end of June, shipments to El Salvador in cryptocurrency wallets represented 1.88% of the 6,406.67 million dollars that entered between September 2021 and last June.
October 2021 was the month with the most remittances to El Salvador (one month after the Bitcoin Law was approved) with 29.68 million dollars and since then, remittances have not exceeded 20 million dollars per month. Last May, they entered 15.59 million dollars.
The Future of Chivo Wallet amidst Rumors
The Minister of Finance of El Salvador, Alejandro Zelaya denied a series of rumors circulating on local social networks regarding the future of the Chivo Wallet. The official added that both Bitcoin (BTC) and the Chivo Wallet are a strong bet by the current government:
“We have been very emphatic in our commitment to the use of the Chivo Wallet. And the use of Bitcoin in El Salvador is a bet for the future. It is a bet that we are going to maintain, and we fully know that it is not going to give overnight results.”
By Audy Castaneda