A recent survey conducted by the Francisco Gavidia University (UFG) highlights a stark reality regarding Bitcoin's adoption in El Salvador.
Only 7.5% of citizens reported using Bitcoin for transactions, a disheartening figure given the government's significant investment in promoting the cryptocurrency since it was declared legal tender in September 2021.
The survey, conducted from 25 to 30 September 2024, involved 1,224 respondents, predominantly aged 18-29, with a majority residing in urban areas.
The overwhelming response indicates a deep-seated skepticism towards Bitcoin among Salvadorans, as 92% stated they do not use the cryptocurrency for transactions.
This finding raises crucial questions about the effectiveness of the government’s initiatives aimed at integrating Bitcoin into the daily financial lives of its citizens.
Among the participants, only 0.5% expressed uncertainty about the question posed, reflecting a clear understanding of their usage habits.
The survey also explored public priorities for the future of El Salvador, revealing that a mere 1.3% of respondents viewed Bitcoin as a key focus area.
Instead, the majority urged the government to concentrate on education and industrial development.
This widespread preference illustrates a disconnect between the government's vision and the populace's needs and aspirations.
Despite the tepid response to Bitcoin, President Nayib Bukele retains significant support among Salvadorans.
Survey participants rated his presidency with an average score of 8.43 out of 10, indicating a high level of approval.
His government scored a 7.49, while the National Assembly received a lower score of 6.94.
Such figures reflect an optimistic outlook on Bukele’s leadership, with around 80% of respondents feeling neutral or positive about the nation's financial situation.
This optimism exists alongside a lack of enthusiasm for Bitcoin, highlighting a complex dynamic in public sentiment.
Criptonoticias noted that prior surveys indicated a Bitcoin adoption rate hovering around 20%, suggesting a notable decline in interest.
A similar study from January 2024 revealed adoption rates of over 10%, further indicating a downward trend.
The UFG findings echo a growing wariness about Bitcoin, contrasting sharply with previous years when enthusiasm for the cryptocurrency was more pronounced.
One of the government's main justifications for adopting Bitcoin was its potential to enhance the economy by increasing financial inclusion and reducing remittance costs for Salvadorans living abroad.
However, the reality appears grim.
According to the IUDOP study published in early 2024, only 16.3% of respondents felt the economy had improved since Bitcoin's introduction.
Over half — 52.9% — perceived no change, and 18.6% believed their situation had worsened.
Translated image / Source: IUDOP
Many Salvadorans remain heavily reliant on the U.S. dollar for daily transactions, and the anticipated benefits of Bitcoin, such as cheaper remittance options, have not materialised as hoped.
Data from the Salvadoran Central Reserve Bank (BCR) indicates that from January to August 2024, remittances sent via cryptocurrency wallets accounted for only 1.05% of total remittances, down 3.51% from the same period in 2023.
This dismal statistic reflects the challenges facing Bitcoin as a viable alternative for financial transactions.
The Salvadoran government, under President Bukele, has heavily invested in Bitcoin, allocating approximately $150 million to a trust fund designed to convert Bitcoin to U.S. dollars.
This fund aims to ensure citizens can exchange the cryptocurrency without incurring financial losses, with overall costs related to the Bitcoin initiative estimated at around $329 million.
However, this substantial investment has yet to translate into widespread adoption or economic improvement.
Critics argue that the funds dedicated to Bitcoin could have been better spent on pressing social issues like education, healthcare, and infrastructure development.
President Bukele remains committed to his vision, believing Bitcoin will ultimately liberate El Salvador from traditional financial systems.
He maintains a pro-innovation stance, hoping that international interest in the country’s crypto-friendly policies will drive adoption.
Despite the dismal adoption rates, Bitcoin remains legal tender in El Salvador, and the government shows no signs of retreating from this position.
Moving forward, addressing the barriers hindering Bitcoin adoption is crucial.
Public education is a vital component in overcoming skepticism, as many Salvadorans lack understanding of how Bitcoin operates and fear its price fluctuations.
Moreover, enhancing access to the necessary technology for using Bitcoin is essential.
Although smartphones are becoming more prevalent, many citizens still face challenges such as unreliable internet access and insufficient digital literacy.
Without tackling these issues, Bitcoin will remain largely inaccessible to the majority of the population.
As El Salvador navigates its role as the first country to embrace Bitcoin as legal tender, the road ahead is uncertain.
The government must address the hurdles that prevent citizens from adopting this digital currency.
If Bitcoin can demonstrate its potential as a more efficient means of receiving remittances and conducting transactions, it might slowly gain traction.
However, this will require substantial efforts to build the necessary infrastructure and public confidence in the cryptocurrency.
As of today, El Salvador’s Bitcoin holdings have grown to 5,903.77 BTC, valued at approximately $385.5 million.
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