- According to a recent report, 77.1% of Salvadorans want the government to stop “spending public money on Bitcoin.”
- Study results show that only 24.4% of respondents have used cryptocurrency as a payment instrument since its legal adoption late last year.
- A number of financial experts in El Salvador criticized the country’s government for making Bitcoin a legal tender in September 2021.
The José Simeón Cañas Central American University in El Salvador has published a report of its survey on the adoption of Bitcoin in the country. The study, as revealed, assessed the perceptions of local El Salvador residents about Legislative Decree No. 57, which approved the largest cryptocurrency by volume as a legal tender.
The Central American University analyzed a total of 1,269 valid interviews for the study. According to the published report, the survey has a margin of error of 2.75% on a 95% confidence interval.
An analysis of the survey shows that 77.1% of respondents want the Salvadoran government to stop “spending public money on Bitcoin.” According to the study, only 24.4% of respondents have used cryptocurrency as an instrument to make payments since its legal adoption late last year. Additionally, 95% of the respondents in the survey affirmed that their lives “stayed the same” or “[have] become worse” since the government approved Bitcoin as a legal tender.
“Cryptocurrencies Pose Danger to Fragile El Salvador Economy”
Recall that in September 2021, El Salvador officially became the first country to make Bitcoin a legal tender. As a result, any kind of transaction within the country could be carried out using the asset.
During that time, El Salvador President Nayib Bukele described Bitcoin “as a path to financial freedom.” He maintained optimism that the adoption of the crypto would help cater to the 70% of Salvadorans who lacked access to traditional banking and described cryptocurrencies as faster and cheaper to get remittances from abroad.
At a time when Bitcoin was selling for about $47,000, El Salvador, under Bukele, invested over $111,907,000 million into the largest cryptocurrency by market volume. This development was then greeted with criticism by numerous financial experts in the country. There was concern that cryptocurrencies could pose a greater threat to El Salvador’s fragile economic system.
Tatiana Marroquín, a Salvadoran economist, berated the move by the government, saying it brings great harm to the economy.
“It seems that for them, El Salvador is just a tool to promote their cryptocurrency. El Salvador isn’t just a means to an end — for us, El Salvador is the end,” Marroquín said.
In a similar vein, the former president of the Central Bank of El Salvador stated that cryptocurrency has not achieved the government’s principal objectives of increasing financial inclusion and reducing remittance costs.
On the Flipside
According to a report from the El Salvador Reserve bank, the recent rise in tourism and foreign investment can be attributed to the El Salvador Bitcoin tender.
Why You Should Care
This recent report shows that cryptocurrencies are facing yet more challenges as adoption becomes more difficult in this unfavorable market.
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