January 19, 2024

El Salvador's Bitcoin Adoption Declines to 12% in 2023

A recent study conducted in El Salvador has disclosed that approximately 12% of the population has embraced Bitcoin.

In 2023, El Salvador underwent a noteworthy transformation in its utilization of Bitcoin, with 12% of its populace engaging in BTC transactions for goods and services. This revelation is based on an annual survey carried out by José Simeón Cañas Central American University, which involved 1,280 respondents in December 2023.

A comparison with the preceding year's data indicates a decrease in Bitcoin adoption, plummeting from 24.4% in 2022 to the reported 12% in 2023. The survey delves into the frequency of bitcoin usage for payments, revealing that nearly half of the respondents (49.7%) utilized the cryptocurrency for transactions between one to three times. In contrast, 20% of participants engaged in more extensive use, conducting 10 or more transactions. Sectors such as groceries (22.9%) and supermarkets (20.9%) witnessed the most significant bitcoin expenditure, closely followed by veterinary clinics (15%).

Despite the decline transactions, there is a noticeable uptick in the perception that family life improved due to bitcoin becoming legal tender. In 2022, only 3% believed in this improvement, while the figure rose to 6.8% in 2023. This suggests a growing connection between the integration into the economy and perceived enhancements in the daily lives of Salvadorans. Interestingly, over a third of respondents (34.3%) feel that the overall economic situation in the country improved, attributing this improvement mainly to a reduction in crime (24.3%).

Surprisingly, a mere 0.5% of Salvadorans associate Bitcoin adoption with the enhancement of the economy. The 45-page survey, however, lacks inquiries regarding the Salvadoran government's bitcoin investments, raising questions about the public's awareness and understanding of such endeavors. This omission is critical as concerns about the government's bitcoin investments are underscored by the 'Nayib Bukele Portfolio Tracker', revealing that the government's bitcoin portfolio has yielded approximately 0.57% in profit. Despite this financial gain, a significant portion of the population appears dissatisfied with the government's allocation of public funds to BTC.

The survey results unveil a nuanced perspective on Bitcoin's impact on the Salvadoran economy. While some perceive positive changes in family life and the overall economic situation, a substantial number remain skeptical about the connection between Bitcoin and these improvements. Additionally, the decline in usage suggests a potential reassessment of bitcoin's role in everyday transactions among the Salvadoran population. Public sentiment regarding the government's involvement with Bitcoin is divided, with 77.1% expressing a desire for the government to cease "spending public money on bitcoin".

As the Salvadoran government navigates its Bitcoin-related initiatives, these survey results provide valuable insights into the evolving dynamics between the population, Bitcoin adoption, and government decisions. The survey signals a need for increased transparency and communication to address public concerns and ensure a more informed and inclusive approach to blockchain and cryptocurrency policies in El Salvador.

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