El Salvador gained fame as the first nation to recognize Bitcoin as legal tender in 2021.
The country’s president, Nayib Bukele, revealed plans to establish the world’s first Bitcoin City, showcasing their admiration of the cryptocurrency.
El Salvadorans Still Prefer Traditional Payment Methods Over Bitcoin
Despite the national recognition, most El Salvadorans have yet to warm up to Bitcoin. A new survey revealed that locals of the Central American nation shy away from Bitcoin transactions and instead opt for familiar options.
A new survey from the San Salvador University, Francisco Gavidia (UFG), reflects the poor adoption of Bitcoin for transactions in El Salvador. The survey shows that 92% of locals don’t engage in Bitcoin transactions.
The new survey on October 10 reflects a huge decline in Bitcoin transactions. A previous study claimed that 88% did not use Bitcoin for their transactions.
The survey sampled over 1,000 adults in El Salvador. 60% of the respondents expressed strong support for President Bukele. Interestingly, only 1% saw Bitcoin as important enough for the country’s future.
Why the Decline in Bitcoin Transactions?
A lack of trust is why Bitcoin struggled to gain traction as a medium of transaction in El Salvador. A large portion of the population simply did not trust the system. This comes from a failure to understand the needs of the people.
Bukele’s government rolled out Bitcoin without understanding the needs of the average citizen. Studies find that attempts such as the Chivo Wallet, in which locals were meant to access Bitcoin, did not align with the financial realities of everyday citizens. Here is a chart from 2022, where citizens had the same behavior:
Since El Salvador adopted bitcoin, 86% of Salvadoran merchants have not processed a single bitcoin transaction: https://t.co/mJXwysiKoS
Not surprising. Bitcoin is not a good payments medium. Even when propped up by government coercion, people avoid using it.
ht @davidgerard pic.twitter.com/4VBUVbIbNq
— John Paul Koning (@jp_koning) March 18, 2022
El Salvador has one of the poorest economies globally. The average citizen did not appear interested in using new payment methods like Bitcoin. Also, there was no proper research on how Bitcoin could address the basic needs of the people. Some locals have a poor understanding of Bitcoin and digital assets.
El Salvador’s design and implementation lacked empathy and a practical understanding of how locals would interact with the new payment method.
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