Bitcoin adoption in El Salvador shows minimal economic impact
The Financial Action Task Force of Latin America (GAFILAT) reported that Bitcoin (CRYPTO:BTC) adoption in El Salvador has not significantly impacted the country's economy or achieved high transactional volumes.
Despite Bitcoin becoming legal tender in 2021, GAFILAT's evaluation found its use remains marginal within the Salvadoran financial system.
The report states that “even when El Salvador included bitcoin as legal tender in 2021, the adoption has not had a ‘significant impact’ on the country’s economy nor high transactional volumes.”
During the assessed period, Bitcoin transactions amounted to just $6.6 million, which represents less than 0.1% of all assets managed by Salvadoran banks.
The report also highlights the minimal role of Bitcoin in remittances, noting that “less than 1% had been made through digital wallets.”
Most remittance flows continue to be processed via traditional banking entities and financial institutions, reflecting a preference for using the U.S. dollar, the official currency in El Salvador since 2000.
Despite these findings, the Salvadoran government has made substantial efforts to popularize Bitcoin.
This includes launching the Chivo wallet and offering $30 in BTC as an incentive for users setting it up.
However, the GAFILAT report suggests these efforts have yet to translate into widespread Bitcoin adoption.
President Nayib Bukele, who has been the key figure behind the country's Bitcoin policies, recently acknowledged that Bitcoin “had not developed as he wanted it to.”
Nevertheless, Bukele pointed out that Bitcoin has enabled El Salvador to “rebrand itself, bringing investments and tourism to the nation.”
While the economic impact of Bitcoin in El Salvador remains limited, the government continues to view it as a strategic tool for enhancing the country’s global presence.
At the time of writing, the Bitcoin (BTC) price was $56,157.06.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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