El Salvador’s Bitcoin wallet handles $52m in remittances
Salvadorans abroad sent $52m in first five months of this year to nation’s crypto wallet
The president of the Central Reserve Bank of El Salvador Douglas Rodríguez has announced that Salvadorans working abroad sent $52m (£43.6m) back home via the nation’s Bitcoin wallet – known as Chivo – between January and May this year.
The Central American nation became the first in the world to adopt Bitcoin as legal tender in 2021.
In addition to establishing El Salvador as a hub for future Bitcoin development, President Nayib Bukele argued that the policy would make remittance payments cheaper and more efficient.
Chivo’s teething problems
Chivo launched in September 2021 in cooperation with the Mexican cryptocurrency exchange Bitso, attracting more than 2 million users in less than a month – although the wallet did experience some significant issues in the immediate aftermath. It was relaunched in February, with the assistance of crypto exchange software firm AlphaPoint, and eventually onboarded around 4 million users.
Slightly denting the notion of mass Bitcoin adoption, the $52m sent via Chivo, which can facilitate US dollar transactions, accounted for only 1.6% of the total remittances sent.
Although remittance volumes may have slightly risen, the Salvadoran government’s Bitcoin holding has lost substantial value in light of the ongoing crypto winter.
Bukele remains bullish on BTC
Despite the cryptocurrency’s plunge from record highs to its lowest levels since December 2020, Bukele has remained optimistic. At the start of the month, he announced that the government had purchased an additional 80 bitcoins for $19,000 each.
The 40-year old leader added: “Bitcoin is the future! Thank you for selling cheap.”
With debt payments of more than $1bn due next year and the nation’s debt-to-GDP ratio rising to a record 86%, Salvadorans may tire of Bukele’s long-term Bitcoin evangelism and call for a focus on more immediate concerns.
