El Salvador’s Adoption of Bitcoin: Mixed Feelings and Advancements
El Salvador made history by becoming the first nation to embrace Bitcoin as a legal tender more than two years ago. However, a recent study conducted by José Simeón Cañas Central American University revealed mixed sentiments regarding the correlation between the adoption of Bitcoin and perceived improvements in personal well-being.
Mixed Feelings
According to the survey, 12% of the local population in El Salvador used Bitcoin at least once for transactions in 2023. This is a significant decrease from 2022 when 24.4% of Salvadorans engaged in Bitcoin transactions. This decline raises questions about the sustainability and widespread acceptance of Bitcoin in everyday transactions.
Among those who used Bitcoin for transactions, almost half (49.7%) made purchases using the cryptocurrency only one to three times. On the other hand, 20% of respondents used Bitcoin for 10 or more transactions, indicating a notable difference in frequency.
Grocery shopping topped the list, with 22.9% of respondents using Bitcoin for this purpose, followed closely by supermarkets at 20.9%. Surprisingly, 15% of respondents reported using Bitcoin for transactions at veterinary clinics, showcasing the diverse range of businesses incorporating the asset into their payment systems.
Regarding personal well-being, the number of respondents who felt that their family’s life had improved during the past year increased from 3% in 2022 to 6.8% in 2023. However, it is important to note that the majority (93.2%) did not attribute any improvements to Bitcoin usage.
On the economic front, there seems to be a disconnect between crypto use and perceptions of El Salvador’s overall economic situation. Only 0.5% of respondents believe that Bitcoin has played a role in the country’s economic improvement. Instead, more than a third (34.3%) attribute perceived economic improvement to a decline in crime rates (24.3%).
El Salvador’s Advancements Thus Far
Despite the mixed sentiment, El Salvador has made significant advancements since officially endorsing Bitcoin as legal tender. The country’s investment in Bitcoin proved profitable as its portfolio reached $42,000 in December 2023, despite the bear market.
The government also collaborated with stablecoin issuer Tether to introduce the “Adopting El Salvador Freedom Visa Program,” which requires applicants to submit a non-refundable deposit of $999 in either Bitcoin or USDT.
In addition, the Digital Assets Commission granted approval for El Salvador’s Bitcoin-backed bonds, known as Volcano Bonds. These bonds will be accessible on Bitfinex Securities, a regulated segment of the cryptocurrency exchange Bitfinex.
Hot Take: Evaluating the Impact of Bitcoin Adoption in El Salvador
The recent study conducted by José Simeón Cañas Central American University sheds light on the mixed feelings surrounding the adoption of Bitcoin in El Salvador. While some individuals have embraced the use of Bitcoin for transactions, others remain skeptical about its impact on personal well-being and the overall economic situation.
The survey highlights the need for further research and analysis to fully understand the effects of Bitcoin adoption on individuals and the economy. As El Salvador continues to make advancements in its crypto journey, it is crucial to assess and address any concerns or challenges that arise along the way. By doing so, the nation can strive towards maximizing the potential benefits of embracing Bitcoin as legal tender.
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