Majority of El Salvadorans have rejected the state’s Chivo cryptocurrency wallets

The popularity of bitcoin has led to some states not just recognising the cryptocurrency, but putting it alongside fiat currency. For example, El Salvador made bitcoin an official currency along with the dollar in 2021.

To encourage the population to use it, a national cryptocurrency wallet called Chivo was created. As an additional motivation they decided that registration provided the user with a $30 bonus. However, despite the government’s best efforts, the population was not enthusiastic about the idea.

Less than 2% of bitcoin payments are made through cryptocurrencies

According to a survey conducted by the U.S. National Bureau of Economic Research, the number of users of Chivo wallets is quite small. About 1,800 households participated in the survey. They are located in both urban and rural areas.

As the results of the survey show, the wallet is still functioning. Moreover, it is being used on the territory of the state. However, there are practically no payments made through it. It is used as a means to store assets as well as to make transfers in dollars, which is the official currency in the country.

Also, some users noted that the app also acts as a debit card for them to exchange dollars. Many have stopped using cash after trying to make the necessary transactions through the use of cryptocurrency wallets.

Background of the wallet

The Chivo Wallet began operating in the fall of 2021. At the time, El Salvador became the first state to classify cryptocurrency, particularly bitcoin, as a legal means of payment.

According to the then president, Nayib Bukele, the app should help residents save money. Thus eliminating the need to spend on commissions when sending money, especially as it relates to transfers from one country to another.

Despite the grandiose plans, things turned out quite differently. First of all, the launch of the wallet encountered a number of problems. There were problems with the functionality of the application, as well as security breaches.

Many users who downloaded the wallet immediately after its official launch eventually refused to use it. They only installed it to get the promised bonus. After that, they gave it up.

Changing preferences

Although El Salvador authorities planned to make bitcoin “fashionable”, but failed in their plans, the population is still interested in the cryptocurrency. The fact is that many people appreciated all the charms of digital assets, but chose a different wallet for such purposes.

It has been noted that there has been an increased demand for the Bitcoin Beach application. It is in high demand among Pacific coast residents. This is especially true for tourist destinations. Crypto-enthusiasts attribute the massive rejection or ignorance of the Chivo part to the fact that it is insecure.