Despite the big push and a large fraction of people downloading Chivo Wallet, usage of Bitcoin for everyday transactions is low in El Salvador. The US National Bureau of Economic Research says this is concentrated among the banked, educated, young, and male population.
Moreover, the study based on interviews with 1,800 Salvadoran households shows that the number of people using Bitcoin for everyday transactions is not very high. President Nayib Bukele’s government launched Chivo – giving away $30 in Bitcoin for each person who signed up. The wallet accommodates Bitcoin, El Salvador’s existing legal currency, US dollars.
The report highlighted that the main driver of adoption is the $30 bonus offered by the government. But it found that many Salvadorans stopped using Chivo after they had the free bonus. Only 20% of the survey respondents continued to use the digital wallet after spending their bonus. They said 40% of their app downloads took place when Chivo was launched in September 2021.
The study revealed that “virtually no downloads” have taken place, so far, this year. It said Bitcoin recorded slow adoption by merchants. Businesses were required by El Salvador’s law to accept cryptocurrency as a form of payment, but they should have the technical ability to do so. The study’s findings suggest the rule has not been strictly enforced. Of some of the respondents who owned businesses or answered questions about their employers’ payment methods, about 20% are said to have accepted Bitcoin. The majority of the firms, that is around 88%, convert it into dollars instead of keeping a Bitcoin balance in the app.
Since its launch, Chivo has had a litany of technical issues. But this was only number six on the list of reasons why people who knew about the digital wallet didn’t download it. One of the main reasons was the inclination toward cash. Some respondents didn’t trust the Chivo system and Bitcoin. Others attributed it to not having phones capable of using the app.