- It’s been exactly one month since El Salvador’s Bitcoin Law took effect, making the country the first globally to adopt BTC as legal tender.
- Since then, a lot has happened, from technical glitches on the Chivo wallet to rapid adoption to legal inquests and BTC mining by volcanic energy.
One month ago today, a small island country in Central America made history as the first in the world to adopt Bitcoin as legal tender. On September 7, El Salvador adopted the Bitcoin Law, and since then, a lot has taken place. The skeptics have continued to ask questions of the government; the Chivo wallet has experienced technical glitches; some have lost hundreds of dollars as they try to adopt Bitcoin; and most importantly, adoption has soared.
Before El Salvador took the bold step of adopting BTC as legal tender, questions were asked by global institutions such as the IMF and the World Bank as well as leading economists such as Steve Hanke. How would the nation account for BTC’s wild volatility? Would merchants accept BTC? Would Salvadorians download the Chivo wallet? Is the government committed to making a BTC-based economic system work?
A slight peek into what BTC as legal tender would look like
In the four weeks since the Bitcoin Law took effect, such questions have been answered and we have gained a peek into what BTC as legal tender would really look like.
El Salvador’s biggest victory has been in adoption. President Nayib Bukele, the force behind the move, has revealed that about three million people have downloaded Chivo – the official BTC wallet for El Salvador. This is more than even he projected, surpassing his expectation by about half a million people. And it’s not just the downloads, with President Bukele revealing that 2.1 million of the users were active in September.
“Since yesterday, Salvadorans are inserting more cash (to buy bitcoin) than what they are withdrawing from the Chivo wallet ATMs. This is very surprising so early in the game,” he claimed yesterday.
However, a different source has the number of BTC users in El Salvador at a much lower number. According to Salvadoran Foundation for Economic and Social Development, only 12 percent of Salvadorians have used Bitcoin, amounting to about 780,000 people.
The foundation claims to have polled 233 companies across different sectors, with 93 percent revealing that they had yet to accept any BTC payment.
A further breakdown of the figures shows that there is a significant chunk of the users who only downloaded the wallet just to get the $30 that President Bukele promised new users. Reuters interviewed a substantial number of Salvadorians who revealed that once they spent the $30, they have yet to use the wallet again.
One business owner has benefitted from the $30 bonus, with many flocking to his restaurant to spend it. Alexander Diaz, who owns a restaurant that serves chicken wings saw a spike in clients, with almost every other customer paying via the Chivo BTC wallet.
Diaz told Reuters:
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Most of the people who had that bonus wanted to test how it could be spent, so several clients made payments to us with bitcoin. Chivo has benefited small entrepreneurs because it makes the payment method easier for customers.
There have been some glaring, albeit avoidable, challenges. One of these is the technical glitches that the Chivo wallet experienced. For new users, this was a cause for alarm, and some of them have been unwilling to test the wallet again, Reuters notes.
32-year-old Adalberto Galvez, a construction worker, is one of those who lost money to the glitches. “It took my money, but it gave me nothing,” he says of Chivo wallet. Galvez is not new to Bitcoin and claims he has never had such a problem when using other wallets.