The U.S. National Bureau of Economic Research published a study that showed most Salvadorans had stopped using Chivo’s wallet since they received their $30 bonus bitcoins. According to the report, there were no withdrawals or deposits made by Chivo wallet users in any given month.
NBER Study: Only 4 out of 10 Salvadorans Use Chivo Wallet After Government’s Bitcoin Bonus
NBER published an April 2022 work study that asked if cryptocurrency are currencies. It did this after studying bitcoin (BTC), which is legal tender in El Salvador. NBER conducted an in-person survey with 1 800 Salvadoran households over the period of February 2022. The study shows that Salvadorans are not using the Chivo wallet that much and in February, El Salvador’s central bank noted that only 1.6% of remittances were sent via digital wallets.
“Most users who used Chivo after spending the $30 bonus do not engage with the app intensively,” the report highlights. The fixed cost of adopting the Chivo wallet is very high, according to NBER research. Moreover, if it wasn’t for the $30 bitcoin bonus, the study estimates that 75% of the Salvadorans surveyed would have never used it. NBER researchers have found that just four percent of those who downloaded Chivo wallet actually use the app.
88% of Bitcoin-accepting businesses convert back to dollars, study concludes.
“The elasticity of substitution between Chivo Wallet and other methods of payment seems to be large,” the study adds. “On net, among Chivo Wallet users, 10% report spending less in cash, and 11% report reducing their use of debit or credit cards since they downloaded Chivo.”
Unfortunately, despite all the reporting that says otherwise, NBER’s study claims only 20% of Salvadoran businesses reported on accepting bitcoin as a medium of exchange. 90% of those businesses were enterprises and “88% of businesses transform money from sales in bitcoin into dollars.” NBER’s findings further note that roughly 5% of Salvadorans paid their tax obligations via bitcoin (BTC).
“Overall, despite the legal tender status of bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador,” the NBER research paper concludes.
What do you think about the NBER’s study and findings among the 1,800 Salvadoran households? Please comment below to let us know your thoughts on this topic.
Image creditShutterstock. Pixabay. Wiki commons. NBER Research paper
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