A survey shows a 12% usage rate by 2023

El Salvador made history two years ago by becoming the first country to accept Bitcoin as legal tender.

Although the country's financial outlook has seen positive developments, a study by José Simeon Cañas Central American University revealed mixed opinions on the link between Bitcoin adoption and improvements in personal security.

Mixed feelings

According to the survey, 12% of local residents in El Salvador used Bitcoin at least once to pay for goods and services in 2023, a significant decrease from 2022. Using Bitcoin.

The decline in numbers has raised questions about the sustainability and widespread adoption of the premier crypto asset in daily transactions.

About half of those who used bitcoin for transactions – 49.7% – used the crypto asset only one to three times. At the other end of the spectrum, 20% of respondents used Bitcoin for 10 transactions or more, indicating significant variation in the frequency of crypto use.

Meanwhile, grocers have 22.9% of respondents using Bitcoin for grocery purchases, followed by supermarkets at 20.9%. A surprising 15% of respondents said they use Bitcoin for transactions in veterinary clinics, highlighting the variety of businesses that include the asset in their payment systems.

With bitcoin becoming legal tender, respondents who feel their family life has improved in the past year rose from 3% in 2022 to 6.8% in 2023. Although this suggests a positive association, Most of the respondents – 93.2% – have not made any changes in their lives to the use of Bitcoin.

In contrast to the positive relationship between Bitcoin adoption and personal security, the study shows a relationship between crypto use and perceptions of the general economic situation in El Salvador. Only 0.5% of respondents believe that Bitcoin has played a role in the country's economic development. Instead, more than a third of respondents – 34.3% – considered economic improvement to reduce the crime rate – 24.3%.

El Salvador developments so far

On June 9, 2021, the government of El Salvador approved a law in its official gazette establishing the digital currency Bitcoin as legal tender in the nation. The law went into effect on September 7, 2021, making El Salvador the first country in the world to accept Bitcoin as legal tender.

This decision was met with heavy criticism from the mainstream media and traditional financial institutions, a sentiment that was exacerbated during the ensuing bear market.

However, El Salvador has made great strides since then. The country's investment in Bitcoin was profitable as the portfolio was profitable in the middle of the bear market, reaching $42,000 in December 2023.

Taking it a step further, the government has partnered with Statcoin issuer Tether to promote the “Adoption of El Salvador's Independence Visa Program.” Applicants are required to submit a non-refundable $999 deposit in Bitcoin or USDT, and successful applicants will undergo a Know Your Customer (KYC) verification process.

In another development, the Digital Assets Commission has approved El Salvador's bitcoin-backed bonds, known as Volcanic Bonds. According to the National Office of Bitcoin (ONBTC), these bonds will be accessible on Bitfinex Securities, a division of regulated cryptocurrency exchange Bitfinex.