El Salvador’s Bitcoin Future Uncertain as Adoption Falters

• A recent survey has shed light on Salvadorans’ relationship with Bitcoin.
• The country’s digital future hangs in the balance.
• El Salvador’s bold Bitcoin vision is clashing with global financial powers.

El Salvador made history as the first nation to openly embrace Bitcoin , championing its adoption as a legal tender. In September 2021, President Nayib Bukele announced the groundbreaking decision, promising to lead the country into a new digital financial revolution. 

Despite Bukele’s ambitious vision, Bitcoin’s adoption among the Salvadoran population has struggled to gain widespread traction.

El Salvador’s Bitcoin Bust: Survey

A recent San Salvador Universidad Francisco Gavidia survey revealed the state of Bitcoin adoption in El Salvador. According to the study , a staggering 92% of 1,224 respondents admitted to not utilizing the cryptocurrency in transactions, while only 7.5% confirmed positively.

The findings draw similarities to a previous 2023 survey conducted by the National Bureau of Economic Research, which indicated that most Salvadoran households still favor cash as their primary medium of exchange, even after being exposed to the digital asset.

Source: Universidad Francisco Gavidia (UFG)

Additionally, while most respondents praised Bitcoin president Nayib Bukele and his administration,  only 1.3% expressed support for his vision, with many arguing against relying on the crypto asset as the “main bet” for the nation’s future. 

UFG’s statistics reinforce previous admissions by the president that his Bitcoin experiment has not been much of a success. According to an August 2024 TIME report, the president admitted that Bitcoin “has not had the widespread adoption” he hoped for. While he emphasized that the positive benefits of the integration outweigh the negative,  he conceded that the future outlook remains bleak.

Meanwhile, international resistance poses an additional threat to the country’s Bitcoin success.

IMF vs. El Salvador over Bitcoin Vision

Despite becoming an integral part of the global financial system, Bitcoin and the broader crypto industry still face opposition from global financial authorities. As such, El Salvador’s bold embrace of the crypto giant has not come without its challenges.

Recently, the communications director for the International Monetary Fund (IMF), Julie Kozack, revealed that the organization, which has long questioned Bitcoin’s potential , remains at odds with El Salvador over its adoption of Bitcoin as legal tender.

The disagreement has complicated the country’s ability to secure financial support, with the IMF citing potential risks to economic stability and productivity. The IMF has also laid out strict conditions for the nation’s financial assistance, urging El Salvador to reconsider its Bitcoin ambitions and limit citizens’ exposure to the digital currency.

On the Flipside

• Previous findings revealed that Many Salvadorans avoid using Bitcoin because they don’t fully understand it.
• El Salvador’s portfolio holds around 5,700 BTC.
• The nation is up approximately 52% in profit on its stash.

Why This Matters

The poor adoption of Bitcoin in El Salvador dims the country’s prospects and risks setting a discouraging example for other nations seeking to follow suit.

Read this article for more about reservations on El Salvador’s digital strategy:
Was El Salvador’s Bitcoin Adoption Just a Marketing Gimmick?

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