El salvador made a big bet on bitcoin Last year it became the first country in The world to adopt the cryptocurrency as Another form of legal tender next to the Us dollar citizens can now from today Technically use bitcoin to buy virtually Anything so we're talking a cup of Coffee a haircut they can also pay their Taxes in bitcoin but on paper el Salvador looks like the perfect place to Try and experiment if you will For several reasons one of the reasons There are six billion dollars of Remittances that go from the united States to people in el salvador so the Big push by the president down there was To Take some of the fees that are paid on That those remittances and put them in The pocket of the people down in el Salvador to the tune of about 400 500 million dollars and to make it easy The government created the shiva wallet App and encouraged everyone to use it to Easily convert us dollars to bitcoin it Also offered 30 worth of bitcoin as a Bonus to any citizen who downloaded the App that incentive drew some initial Interest but that was eight months ago Today the bitcoin strategy has lost its Steam glitchy transactions and volatile Bitcoin prices have led to slow adoption There's a High percentage of them that have
Troubles with the application either Downloading the application or has some Technical issues with the application So about 50 of the population have tried To download a cheapo wallet Or a A lower fraction has been able to use That the application and these people Have been Have downloaded the application only for The sake of using the 30 bonus that was Given by the by the government so some Of the Reasons people state why they haven't Downloaded chibo wallet is because they Prefer cash Uh or because they don't trust the System or they don't uh trust bitcoin And some of the reasons why people Haven't used bitcoin it's a that they State that they don't trust it that they Don't understand it and that the prices Of bitcoin are very volatile Shiva wallet users have also reported Unauthorized charges and failed Transactions users reportedly lost Account details thanks to phishing scams And identity theft as well and the Number of users has dropped considerably In 2022 compared to last year when the App was initially launched despite the Government's aggressive efforts to push For bitcoin adoption recent reports show Only 20 percent of adult citizens in the
Country use the shiva wallet the reality Is a majority of people in el salvador Pay for most things in cash 70 of el Salvadorans don't even have a bank Account while 90 percent of them don't Use mobile banking Some people simply don't have a phone With internet to use the shiva wallet While others don't understand bitcoin or Don't trust it as for businesses only 14 Except bitcoin with cash being the main Source of payment we also found in our Survey that around 80 of firms are not Accepting bitcoin at this point so the Firms that have started accepting Bitcoin are not a random set of firms These are actually large firms in a set Of other firms that were already Accepting card Before so so if you're thinking about Financial inclusion uh even from the Firm side it doesn't seem like much Inclusion is going on these are large Firms firms that were already kind of uh Like using other means of payments Before This slow adoption goes against the Bitcoin law el salvador's president Signed last year that law states that Every business has to accept bitcoin as Payment along with allowing bitcoin to Be used for tax contributions and Foreign transactions still the Government hopes bitcoin adoption will
Increase financial inclusivity boost Economic development and make el Salvador more attractive for foreign Investments International organizations and the u.s Have been critical of el salvador's Decision in approving bitcoin as legal Tender the international monetary fund Or imf urged el salvador to reverse Course warning that adoption of bitcoin Threatens financial stability and Consumer protection the government of el Salvador however remains bullish on Bitcoin the treasury minister said no International organization is going to Make us do anything anything at all in Response to the imf's condemnation of Its use of bitcoin as legal tender
