A new survey by Francisco Gavidia University in San Salvador reveals that Bitcoin usage for everyday transactions in El Salvador is decreasing. According to the study, only 7.5% of respondents use cryptocurrency, while 92% admitted they do not.
El Salvador became the first country to make Bitcoin legal tender in 2021, a decision championed by the nation’s millennial president, Nayib Bukele. Despite the legal requirement for businesses to accept Bitcoin if they have the technology, the cryptocurrency has struggled to gain widespread adoption among Salvadorans.
Bitcoin Usage Declines in El Salvador
Compared to a 2023 study conducted by the University of Central America’s public opinion institute, which indicated that 88% of respondents did not utilize Bitcoin for transactions, the survey suggests that Bitcoin adoption has marginally decreased. President Bukele’s bold aim to turn El Salvador into a centre for Bitcoin innovation is doomed by this trend.
Since El Salvador accepted Bitcoin as legal tender in September 2021, President Bukele’s passion for the cryptocurrency has been evident. He saw Bitcoin as a way to bring in international investment, modernize the nation’s economy, and lessen dependency on established banking institutions.
Bukele has even gone so far as to advocate for the establishment of a “Bitcoin City” that would run on volcanic energy and provide Bitcoin “Freedom” visas to investors who are prepared to put money in the nation. Only 1.3% of Salvadorans, according to the most recent survey, think Bitcoin should be the primary economic plan for their nation going forward.
Despite the limited adoption of Bitcoin, the survey found that 58% of the 1,224 people interviewed were supportive of President Bukele’s overall leadership and direction for the country. His policies, particularly his hardline stance on crime, have earned him significant popularity at home, even as some of his decisions on Bitcoin have faced international criticism.
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International Concerns and Criticism
Although President Bukele has continued to be optimistic about Bitcoin, outside organizations have criticized his policy. Regarding the nation’s financial stability and the dangers of making significant cryptocurrency investments, the IMF and a few American lawmakers have voiced their concerns.
Critics view Bukele’s government’s decision to spend millions of dollars purchasing Bitcoin during market downturns as extremely speculative and dangerous.
At the same time, human rights advocacy groups have voiced alarm over Bukele’s heavy-handed approach to security and crime. His government has launched a sweeping crackdown on criminal gangs, resulting in the incarceration of nearly 2% of the country’s population.
While many citizens support this move, human rights groups have raised concerns about a lack of due process and the mistreatment of prisoners during the crackdown.
Limited Bitcoin Adoption
President Bukele said in an August interview with TIME that El Salvador’s acceptance of Bitcoin has fallen short of expectations. “Bitcoin hasn’t had the widespread adoption we hoped for,” he said, drawing attention to the discrepancy between the official government goal and the actual condition of affairs.
Even though companies must take Bitcoin, the majority of transactions in the nation are still made with US dollars, which continue to be the most common currency.
The lack of Bitcoin adoption in El Salvador underscores the challenges in integrating cryptocurrency into a national economy. For many Salvadorans, Bitcoin’s volatility, lack of understanding, and limited practical use in daily transactions have contributed to its slow adoption.
Despite this, President Bukele continues to push for more foreign investments through Bitcoin-friendly policies, hoping to turn El Salvador into a leader in the global crypto space.