Low-cost remittances are one of the key selling points cited by El Salvadoran President Nayib Bukele when he announced a law to make Bitcoin legal tender in the Central American country a year ago.
Bukele said using bitcoin remittances through the state-owned Chivo digital wallet could save the country a significant amount of money each year.
“Our employees pay $400 million a year in remittance fees,” said Bukele when the project started last October. According to Be In Crypto“That savings alone will be of great benefit to our people, or at least those who want it. It also has the benefit of not carrying cash. Safer, more practical.”
However, bitcoin remittances have never been very active, with well below 2% of the total amount received.
He added that it fell further in the third quarter of 2022, down 6% to $32 million from $34.22 million in the second quarter.
Remittances are an important part of the Salvadoran economy, Giving $7.5 billion in 2021according to Inter-American Dialogue, an NGO citing World Bank figures. That number is estimated to reach $7.8 billion this year, accounting for 27% of GDP.
He added that 94% of that came from the United States, according to figures from the Central Reserve Bank of El Salvador.
That’s a problem, considering it spent an estimated $107 million to buy 2,381 BTC for the national treasury. We will provide every citizen with $30 in Bitcoin to encourage them to download the Chivo wallet, as well as other costs associated with starting and running the program.
It also led the International Monetary Fund (IMF) to stop the debate $1.3 billion loan We need Eurobonds that mature in early 2023. This has led to repeated downgrades of the country’s bond ratings to the point of junk territory as rating agencies determined that default was more likely.
Distortion is appearing. Bukele is hugely popular, with approval ratings hovering in his 80% range, but his Bitcoin program has come under fire, with a recent survey showing his two-thirds in the country. . deem it a failure Also, three-quarters have never used cryptocurrencies.
another symbol falls
While the overwhelming majority of Bitcoin ATMs are in the United States, El Salvador was the third largest country in the world in terms of crypto ATMs after Canada. Dropped to 4th place According to Coin ATM Radar.
The ranking itself is effectively meaningless, but this is important. According to the site, virtaTher US has about 34,000 Bitcoin ATMs. Canada followed with her 2,566 and Spain with 215, overtaking El Salvador with her 212.
so what? These ATMs were the epitome of the Bukele administration’s Bitcoin currency project, which was intended to allow users to send and receive cryptocurrencies using digital wallets.
However, in August the government had to deny reports that: they had been deleted He said it was simply moved by the city government of San Salvador because it was not in use.
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