According to a study published by the US National Bureau of Economic Research (NBER), most Salvadorans stopped using the Chivo wallet after receiving their $30 bitcoin bonus. The report shows that the median Chivo wallet user made no deposits or withdrawals in any given month.
NBER Study: Only 4 in 10 Salvadorans Use Chivo Wallet After Government Bitcoin Bonus
One April 2022 work study published by the NBER, asks if cryptocurrencies are indeed currencies after researching Bitcoin (BTC) as legal tender in El Salvador. The NBER conducted a face-to-face survey of 1,800 Salvadoran households during the month of February 2022. The study shows that Salvadorans do not use the Chivo wallet much and in February, the central bank of El Salvador noted that only 1.6% of remittances had been sent. through digital wallets.
“Most users who have used Chivo after spending the $30 bonus do not use the app extensively,” the report points out. In fact, the NBER researchers found that the fixed cost to adopt the Chivo wallet was very significant. Moreover, without the $30 bitcoin bonus, the study estimates that 75% of Salvadorans surveyed would never have used it. NBER researchers note that only four out of ten people who have downloaded the Chivo Wallet actually use the app.
88% of businesses accepting bitcoin convert back to dollars, the study concludes noting that bitcoin is not a widely accepted currency in El Salvador
“The elasticity of substitution between Chivo Wallet and other payment methods appears to be significant,” the study adds. “On the net, among Chivo Wallet users, 10% say they are spending less on cash and 11% say they have reduced their use of debit or credit cards since downloading Chivo.”
Unfortunately, despite all the reports to the contrary, the NBER study claims that only 20% of Salvadoran businesses reported accepting bitcoin as a medium of exchange. 90% of these businesses were businesses, and “88% of businesses turn bitcoin sales money into dollars.” The NBER findings further note that approximately 5% of Salvadorans have paid their tax obligations via bitcoin (BTC).
“Overall, despite bitcoin being legal tender and significant government incentives, cryptocurrency is largely not an accepted medium of exchange in El Salvador,” the research paper concludes. NBER.
What do you think of the study and the conclusions of the NBER among the 1,800 Salvadoran households? Let us know what you think about this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, NBER research paper
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