A survey has found that Salvadorans are using the state-run Chivo bitcoin (BTC) app and wallet sparingly if at all, with most simply downloading it to receive a USD 30 worth of bitcoin as a golden hello before returning to using the dollar.
The survey was conducted by the United States’ National Bureau of Economic Research, in association with Cid Gallup. Details were published by Bloomberg, which concluded that this was evidence that BTC had failed to “take root” in the Central American nation.
The survey saw 1,800 adults in the country interviewed “face-to-face” in February this year, and asked about how they use the wallet. Only 20% of respondents said they continued to use the Chivo Wallet after making use of the USD 30 giveaway, the survey authors concluded, adding that “virtually no one” had “installed Chivo on their phone in 2022.”
The authors added:
“The most important reason not to download the app, conditional on knowing about it, is that users prefer to use cash, which was followed by trust issues – respondents did not trust the system or bitcoin itself.”
The authors also reported finding “no evidence” that the Chivo wallet was being used to pay taxes and remittances “at a significant scale.”
The media outlet pointed out that this data was “in line” with data from El Salvador’s central bank that showed that “only 1.6% of remittances were sent through digital wallets in 2022.”
In the business sector, 20% of businesses reported accepting bitcoin as a form of payment, with most of these being “large firms. The study authors were quoted as adding that “on average, 5% of all sales were in bitcoin “and most transactions were converted to dollars.”
The media outlet El Diario de Hoy reported that per the Central Reserve Bank itself, in an update made on March 25, between January and February 2022, some USD 1.1 billion was remitted to El Salvador, with only USD 19 million of that figure entering via the Chivo Wallet in the form of bitcoin transactions.
On Facebook, some took a more optimistic view of the findings, with one commenter writing:
“Actually, the [uptake] percentage is pretty incredible, despite all the negative press. Many more will come [onboard].”
In his latest blog post, former CEO Arthur Hayes opined that El Salvador is “still a functioning state that can afford to trade internationally, even though a small percentage of their foreign currency reserves” is held in BTC.
The country, Hayes argues, is the first real test case of “a flag that finally started to think in its best interest and eschew the outdated and unhelpful economic policies promoted” by the International Monetary Fund (IMF) and the World Bank. He added that he is “eager” to see if other small countries would follow in El Salvador’s steps.
Hayes concluded that,
A virus spreads slowly, then exponentially. Don’t be disheartened if the pace of idea propagation appears slow at the outset. The righteous shall prevail eventually. El Salvador is the first small, but extremely important step towards denting the hold orthodox economic thinking has on global monetary policy makers.