A Study was released on the behalf of the Economic Bureau of Economic Research asserting that the Chivo Wallet of El Salvador has been smashed. Researchers mention that notwithstanding the spiking interest initially, a decrease is being witnessed at present in Chivo Wallet’s utilization as well as concentration among those who are already banked as well as learned young males. They added that in the present year, no downloads have been seen. These factors indicate that the El Salvadoran experiment with Bitcoin is faltering.
A twist in the Chivo-Wallet trial of El Salvador
In September last year, BTC secured a place of being the legal tender across El Salvador, signifying a groundbreaking move in the history of crypto adoption. The primary crypto asset was supported by the Chivo Wallet (the digital wallet backed by the Salvadoran government), which allowed for simple as well as rapid payments in Bitcoin and dollars. To provide incentives in downloads, each among the latest consumers can claim BTC worth up to $30 for free.
In the previous year, as compared to the United States, only 65% of the citizens of El Salvador were having access to the internet whereas 85% was the ratio of the adults from the U.S. Just a 50% of the people knew about the Chivo Wallet and downloaded the application. The majority of the respective downloads were carried out only following the launch of Chivo Wallet in 2021’s September.
A plunge in the use of Bitcoin for payments
The participants of the study, who had downloaded the application, informed that the chief factor at the back of their attraction toward the wallet was the $30 bonus offered in Bitcoin. Delving further into the matter, it was disclosed by the participants that the wallet or even the BTC was not trusted by them, thus they preferred cash as a method of transfer. Fewer than 50% of the respondents who proceeded to download the application moved on to utilize it following the expenditure of the received bonus, equating to the respondents’ 20%.
In addition to this, the continuous users of the wallet did not utilize the application to a great extent. Apart from that, they pointed out that no evidence was found by them regarding the payments of taxes or the remittances through Chivo Wallet at a considerable scale. As concluded by the researchers, notwithstanding the legal tender position of Bitcoin, the front-running crypto is not being thoroughly utilized as an exchange medium.