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Barely one month after El Salvador’s Bitcoin Law went live, a great majority of the country’s residents have adopted this emerging asset class.
According to a Forbes report on Friday, there are currently more Salvadorans using the country’s Chivo bitcoin wallet than there are those with bank accounts.
About three million Salvadorans currently have the Chivo wallet app downloaded on their devices, and according to the country’s president, Nayib Bukele, this number represents about 46% of El Salvador’s population, a contrast to the 27% of residents with bank accounts recorded in 2017.
Interestingly, this figure represents only those using the Chivo wallet. President Bukele pointed out earlier that Salvadorans are not mandated to use the Chivo wallet as they can choose to use any other type of Lightning Network-enabled bitcoin wallet.
Additionally, an increasing number of Salvadorans are quickly converting their USD into bitcoin and holding onto the digital asset, using it for day-to-day transactions in stores where they are accepted.
The bitcoin adoption decision made by El Salvador has fostered financial inclusion among low-income Salvadorans who have no access to banks.
Users only need a smartphone and internet access to make use of the digital currency, and this has seen many of El Salvador’s poorest regions enjoy the benefits of bitcoin.
Merchant Adoption Struggles
While El Salvador has witnessed a surge in the number of bitcoin users, only a handful of businesses operating in the country have received payments in bitcoin.
Plagued with several technical issues, businesses and consumers are finding it very difficult to use their bitcoins to make purchases.
A survey conducted by the Salvadoran Foundation for Economic and Social Development on 233 companies across different sectors revealed that a whopping 93% of companies have not received any bitcoin payment.
A ‘Forward-Thinking’ Decision
El Salvador made waves globally when it became the first country to adopt bitcoin as a legal tender, with President Bukele expressing his belief in bitcoin’s potential.
While this decision was met with mixed reactions, with bitcoin critics not hiding their displeasure in the move and bitcoin enthusiasts showing their full support for it, President Bukele remains certain that it was a “forward-thinking” decision.