El Salvador Sees Drop in Crypto Remittances
El Salvador has experienced a significant decrease in remittances conducted in Bitcoin and other cryptocurrencies in the first half of 2023. While traditional remittances grew by over 5%, the country’s crypto remittance program saw a 26.5% drop in usage.
Key Points:
- Salvadorans living abroad sent nearly $4 billion to the country in H1 2023.
- Remittance in crypto decreased by 26.5%, while traditional remittance went up by 5%.
- Only $46.7 million was remitted via Bitcoin and other cryptocurrencies.
- Banks processed about $1.45 billion, and remittance platforms like Wise and Remitly handled around $2.4 billion.
- Remittances to El Salvador grew by 5.2% compared to the same time in 2022, but BTC usage dropped significantly.
El Salvador’s Bitcoin Project Faces Challenges
The decrease in Bitcoin remittances raises concerns for El Salvador’s Bitcoin project. President Nayib Bukele aimed to offer significant savings to citizens by adopting Bitcoin as a means of remittance, in addition to a cashless and safer payment system. However, with only $46.7 million remitted via cryptocurrencies, it seems that the project is facing headwinds.
Hot Take
The drop in crypto remittances in El Salvador indicates that the adoption of Bitcoin as a legal tender has not been fully embraced by the population. This setback highlights the challenges of implementing widespread cryptocurrency usage in a country’s economy. It remains to be seen whether the government’s efforts to promote Bitcoin will gain more traction in the future.
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