El Salvador’s lofty ambition to lead the world in Bitcoin adoption may require more than the re-election of its Bitcoin-loving president Nayib Bukele, according to merchants and Bitcoin enthusiasts on the ground.
Bukele, who served as president between June 2019 and December 2023, was the driver behind making Bitcoin legal tender in El Salvador in September 2021. On Feb. 4, Bukele secured a landslide re-election victory, with preliminary results showing him winning 83% of the 70% votes currently counted.
BREAKING: The 1st #Bitcoin President Nayib Bukele has officially been re-elected in El Salvador
We are watching history pic.twitter.com/ia18Ifc4kH
— Rizzo (@pete_rizzo_) February 5, 2024
However, a largely tech-illiterate population, lack of merchant enforcement and a mostly sideways Bitcoin market will weigh on El Salvador’s so-called “Bitcoin experiment,” according to Jamie Robinson, chief strategy officer of The Bitcoin Hardware Store.
Robinson explains that the issues first started after the rollout of El Salvador’s Chivo Wallet in September 2021 (when Bitcoin was made legal tender), which, according to him, failed at launch.
But even after those problems were resolved, Chivo devices often ended up uncharged, unupdated and many employees in merchant stores didn’t have the technical know-how to reinstall it, he explained.
A recent study reveals challenges in El Salvador’s Bitcoin adoption, showing limited use of the state-run Chivo Wallet despite government efforts. pic.twitter.com/dCpaecXhV2
— Tiger Research Inc. (@Tiger_Research_) February 5, 2024
Meanwhile, there was a lack of customer demand to pay in Bitcoin, particularly as Bitcoin fell from its all-time high price of $69,000 to as low as $15,600 in early 2023.
“A temporary death spiral occurred,” Robinson said of the situation.
In 2023, only 12% of the local population used Bitcoin at least once to pay for goods and services, down from the prior year, a recent survey by José Simeón Cañas Central American University revealed.
A year before, former Cointelegraph reporter Joe Hall visited El Salvador in 2022 with the aim of…
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