Just a little over one year after El Salvador became the first country in the world to adopt Bitcoin (BTC) as a legal tender, the policy appears to be unpopular among most residents.
In particular, research by the University of Central America (UCA) indicates that about 77% of El Salvador’s residents believe the Bitcoin adoption has been a failure, Barrons reported on October 18.
Interestingly, the study pointed out that despite the government’s efforts to popularize Bitcoin and cryptocurrencies, 75.6% of residents noted that they had never used digital assets in 2022 when the general digital assets market plunged significantly.
Furthermore, with President Nayib Bukele increasingly accumulating Bitcoin, another 77% of respondents opined that the government should stop spending public funds buying Bitcoin.
“Is the government’s most unpopular measure [Bitcoin legal tender], the most criticized and the most frowned upon,” said UCA rector Andreu Oliva.
Less crypto is used in remittance
In adopting the policy, one of El Salvador’s goals was to facilitate remittances back home to evade the traditional banks. Notably, remittances are central to the country’s economy, making up about a quarter of El Salvador’s gross domestic product (GDP).
However, data from the Salvadoran Central Bank in September this year revealed that less than 2% of all remittances involved cryptocurrencies.
El Salvador ventured into Bitcoin at the height of the asset’s bull run, culminating in an all-time high of almost $69,000 in October last year. However, following the significant correction by Bitcoin in 2022, El Salvador has encountered losses amid increasing calls to have the government reverse the policy, with President Bukele remaining defiant.
As reported by Finbold on September 7, 2022, the country’s Bitcoin strategy was generally yet to take off, with the government marketing the country as a global crypto hub.
At the same time, El Salvador’s shift towards Bitcoin inspired other countries in the region to follow suit. However, talks of adopting Bitcoin as a legal tender in other South American countries have gone mute.