El Salvador became the first country in the world to adopt Bitcoin as legal tender in September 2021. However, the adoption has been met with mixed results. A recent survey found that only 14% of Salvadorans have used Bitcoin since it became legal tender.
There are a number of reasons why Bitcoin adoption has struggled in El Salvador. One reason is that Bitcoin is a complex and volatile asset, and many Salvadorans do not understand it or how to use it. Another reason is that there is a lack of infrastructure for using Bitcoin in El Salvador. For example, there are few businesses that accept Bitcoin payments, and there are few ATMs where people can buy and sell Bitcoin.
The Salvadoran government has taken a number of steps to try to promote Bitcoin adoption, such as giving away $30 in Bitcoin to every Salvadoran citizen who downloads the government’s Chivo wallet. However, these efforts have not been successful in convincing a large number of Salvadorans to use Bitcoin.
In addition to the challenges mentioned above, El Salvador’s Bitcoin adoption has also been hampered by the recent decline in the price of Bitcoin. Bitcoin has lost over 60% of its value since El Salvador adopted it as legal tender, and this has made many Salvadorans reluctant to use Bitcoin.
Despite the challenges, the Salvadoran government has said that it is committed to Bitcoin adoption. The government has announced plans to build a “Bitcoin City” at the base of Conchagua Volcano. The city would be powered by geothermal energy from the volcano, and it would be a hub for Bitcoin businesses and startups.
It remains to be seen whether the Salvadoran government’s efforts to promote Bitcoin adoption will be successful. However, the country’s experience with Bitcoin so far has shown that it is difficult to convince people to adopt a new currency, especially when the currency is complex, volatile, and lacks infrastructure.