Crypto News: El Salvador's Crypto Remittance Efforts Stagnate, Accounting for Less Than 1% of Transactions

According to Bitcoin.com News: In El Salvador, the ambitious initiative to integrate cryptocurrency into remittance payments has seen underwhelming adoption rates. According to the Reserve Bank of El Salvador, crypto-based remittances have consistently represented less than 1% of the total remittance share since October 2024. This revelation underscores the challenges facing the widespread adoption of bitcoin for remittances in a predominantly dollarized economy.John Paul Koning, a well-known financial writer, shared via social media that the usage of cryptocurrency for remittances has declined significantly since the nation's landmark decision to legalize bitcoin as tender in 2021. While there was a surge in crypto remittance usage initially, peaking at nearly 5% of all remittances in October 2021, this enthusiasm has tapered off dramatically.The Salvadoran government, led by President Nayib Bukele, initially promoted cryptocurrency as a cost-saving mechanism that would significantly reduce the fees associated with sending money home. In 2021, Bukele criticized traditional financial services for siphoning up to 25% in fees from remittances and introduced Chivo, a state-sponsored crypto wallet, as a zero-commission alternative. Despite these efforts and incentives, including a $30 airdrop to encourage Chivo adoption, the uptake has been minimal.The diminishing use of Bitcoin for remittances coincides with broader regulatory adjustments. Following agreements with the International Monetary Fund, the Salvadoran government has scaled back its bitcoin initiatives, including plans to terminate or sell the operations of the Chivo wallet and the removal of bitcoin's legal tender status within the country.