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Thursday, Oct 21, 2021

More Salvadorans Have Bitcoin Wallets Than Traditional Bank Accounts

More Salvadorans Have Bitcoin Wallets Than Traditional Bank Accounts

It has been a little over a month since El Salvador made Bitcoin became legal tender in the country. Now the number of Salvadorians who have a Chivo wallet is nearly twice as many than those who have a bank account in the country, according to Forbes.

On October 3, President Nayib Bukele tweeted that 3 million Salvadorians – 46% of the population – were using the Chivo.

According to Statista‘s data from 2017 only 29% of Salvadorians had a bank account. While in 2014, the same figure was 35%, showing decline in the banked population.

It would seem that the Bitcoin experiment in El Salvador is going well. But, there has been opposition from the public, and people questioning President Bukele’s motivations to push ahead with the Bitcoin adoption.

What do Salvadorans think of the Bitcoin Law?
While the international financial institutions have raised their concerns and public protests have taken place in the country, President Bukele has remained unswayed with his stance on Bitcoin.

Salvadorians who oppose the Bitcoin adoption say that BTC favors well-resourced speculators. But to use it as a currency, they maintain that extreme volatility means everyday people might lose out.

Critics have also pointed out certain privacy concerns of using Chivo, as the wallet requires users to consent to microphone and contact access.

With some surveys saying two-thirds of Salvadorians oppose the Bitcoin law, Economist Ricardo Castaneda questioned President Bukele’s motivation to continue down and raised concerns of privacy:

“There has been a high degree of improvisation in the rollout of Chivo and a great deal of opacity.

The app asks for access to your microphone and your contacts, which are not needed for a wallet. Bitcoin might be a distraction but given the decision to push ahead with the plan despite popular opposition and the advice of experts, it could also be an important pillar of Bukele’s political project.”

However, there are signs that indicate that the Salvadorans are embracing the change.

Last week, President Bukele tweeted that Chivo wallet users are exchanging into Bitcoin and holding $BTC at a ratio of 4:1.

“Since yesterday, Salvadorans are inserting more cash (to buy bitcoin) than what they are withdrawing from the chivowallet ATMs. And if we add remittances (almost $2 million per day), the incoming USD QUADRUPLES the outflow.”

Are the numbers reliable?
The number do show that more people have downloaded the Chivo wallet than have bank accounts. But, given the $30 incentive to download it, it might not be accurate to say that Bitcoin is more popular than existing legal tender USD?

If local banks had a $30 incentive to open a bank account, there might similar soar in people opening bank accounts.

Also local news outlets in El Salvador have reported instances of identity fraud involving the Chivo wallet. According to El Mundo, some Salvadorians have tried to download Chivo only to discover that their details have already been registered and the $30 bonus claimed.

This doesn’t really speak highly of Chivo’s security, but it also would indicate that the number of wallet users is overstated.

Source: More Salvadorans Have Bitcoin Wallets Than Traditional Bank Accounts – Fintechs.fi

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