Working Study Says Despite Legal Tender Status, Bitcoin Is Not a Widely Accepted Medium of Exchange in El Salvador

Business Study Says Despite Legal Bid Status, Bitcoin Is Not a Widely Accepted Medium of Exchange in El Salvador – Bitcoin News

According to a working study published by the US National Bureau of Economic Research (NBER), most Salvadorans have stopped using the Chivo wallet after receiving a reward of $30 in bitcoin. The report states that the broker Chivo wallet user did not make any deposit or withdrawal in a given month.

NBER Study: Only 4 out of 10 Salvadorans Use Chivo Wallet After Government Bitcoin Bonus

A work study published in April 2022 by NBER asks whether cryptocurrencies are indeed currencies after searching for Bitcoin (BTC) as legal tender in El Salvador. NBER conducted a face-to-face survey with 1,800 Salvadoran households during February 2022. The study showed that Salvadorans do not use Chivo wallet much, and in February, the Central Bank of El Salvador indicated that only 1.6% of remittances were sent. via digital wallets.

The work study says that despite the legal tender status, bitcoin is not a widely accepted medium of exchange in El Salvador
Working paper published by the US National Bureau of Economic Research (NBER).

The report highlights that “most users who have used Chivo after spending a $30 reward do not interact with the app as intensely.” In fact, NBER researchers found that the fixed cost of adopting a Chivo wallet was quite substantial. Furthermore, were it not for the $30 bitcoin bonus, the study estimates that 75% of Salvadorans surveyed would have never used it. NBER researchers note that only four out of ten people who have downloaded the Chivo wallet actually use the app.

88% of Companies Accepting Bitcoin Convert to Dollars, Study Concludes by Noting that Bitcoin Is Not a Widely Accepted Currency in El Salvador

The study adds: “The exchange flexibility between Chivo Wallet and other payment methods appears to be significant.” “On the web, among Chivo Wallet users, 10% reported spending less cash, and 11% reported less use of debit or credit cards since they downloaded Chivo.”

The work study says that despite the legal tender status, bitcoin is not a widely accepted medium of exchange in El Salvador
Working paper published by the US National Bureau of Economic Research (NBER).

Unfortunately, despite all the reports that say otherwise, the NBER study claims that only 20% of Salvadoran companies report accepting bitcoin as a medium of exchange. 90% of these companies were foundations and “88% of companies convert money from bitcoin sales into dollars.” The NBER results also indicate that approximately 5% of Salvadorans have paid their tax obligations via Bitcoin (BTC).

The NBER research paper concluded that “in general, despite the state of Bitcoin’s legal tender and significant government incentives, cryptocurrency is not an acceptable medium of exchange in El Salvador.”

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What do you think of the NBER study and its results among 1,800 families in El Salvador? Tell us what you think about it in the comments section below.

Jimmy Redman

Jamie Redman is the head of news at Bitcoin.com News and a technology financial journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




photo credits: Shutterstock, Pixabay, Wiki Commons, NBER Research Paper

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