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"El Salvador's Crypto Remittances Plummet, Bitcoin's Legal Tender Status at Risk"
Generated by AI AgentCoin World
Thursday, Feb 6, 2025 6:01 am ET1min read
El Salvador's cryptocurrency remittances have remained low, accounting for less than 1% of the total since October 2024, according to data from the Central Bank of El Salvador. This marks a significant decline from the nearly 5% recorded in October 2021 when Bitcoin was officially adopted as legal tender.
Financial analyst John Paul Koning noted the disparity between this low adoption rate and President Nayib Bukele's claims that conventional financial services impose fees as high as 25% on remittances. In contrast, the government's digital wallet, Chivo, promotes zero transaction fees. However, the anticipated boom in cryptocurrency transactions among a largely dollarized populace has yet to materialize.
To comply with an agreement with the International Monetary Fund (IMF), the Salvadoran government plans to either terminate the operations of Chivo or sell it, along with revoking Bitcoin's status as legal tender. These moves are expected to further diminish Bitcoin's economic influence in the country.
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