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El Salvador’s bitcoin use grows but headaches persist

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El ZONTE, El Salvador, October 7 – A number of El Salvadorians experimented with bitcoin as the country first adopted it as a legal tender last month, and migrants sent several million dollars a day using cryptocurrency.

But only a handful of businesses in Central American countries have accepted bitcoin payments, and technical issues have plagued the government’s cryptocurrency application, which has even upset technology users.

Adalberto Galvez, a 32-year-old construction worker, said he lost $ 220 when he tried to withdraw cash from his Chivo digital wallet.

Like Galves, dozens of Salvadorans told Acesparks there was at least one problem with the local word for “good,” Chivo, and rarely did people use it every day.

“It took my money, but it didn’t give me anything,” said Galvez, an experienced exclusive bitcoin economy project based in the coastal town of El Zonte, which has been successfully using bitcoin for several months.

A Chivo worker will help two people use bitcoin on October 4, 2021 at an ATM location in San Salvador, El Salvador.

Galvez said the money was taken from a Bitcoin Beach wallet, but he never received cash through Chivo. He said he did not hear any response after he complained.

Others also reported irregularities in transactions and attempts at stolen identification. President Naib Bukele said the demand for the problems faced by Galvez and others was high.

A spokesman for the president’s office and Chivo could not be reached for comment.

Some measures have been taken in a poor country where one-fifth of families depend on remittances.

Bukele said three million people loaded Chivo, which was initially close to 500,000 and more than half of the country’s population. In September, he said the wallet had 2.1 million active users.

One month after its launch, the Salvador Economic and Social Development Fund reported that 12 percent of consumers used cryptocurrency.

“Since last night, Salvadorans have been depositing more money (to buy #bitcoin) than they have taken from @chivowallet ATMs,” Bukele wrote Wednesday. “It’s pretty amazing at the beginning of the game.”

But the fund, which surveyed 233 companies across various industries, found that overall usage was still low, with 93% of companies not reporting bitcoin payments.

On October 5, 2021, a man in San Salvador, El Salvador, legalized Bitcoin.
A man walks past a graffiti in San Salvador that says “Bitcoin is equal to corruption” as part of a campaign against the use of Bitcoin as a legal tender.

“We still don’t know what benefits the government expects,” said Leonor Selva of the National Association of Private Enterprises.

Migrant money

The Bukele government hopes that 2.5 million El Salvadorans living in the United States will eventually send remittances through Chivo.

So far, 30 bitcoin ATMs have been set up in Atlanta, Chicago, Houston and Los Angeles to send money transfers, and Bukele said about $ 2 million is sent through Chivo every day.

Juan Moz, a construction worker who has lived in the United States since 2005, recently chose Chivo to send money transfers home to his family – which he says saves up to $ 18 more than traditional money transfer services. .

“I will definitely continue to use it,” he said in a phone interview from San Francisco.

However, much of El Salvador’s $ 6 billion annual remittances – about a quarter of the country’s gross domestic product – come through remittances, and many are wary of cryptocurrency volatility.

Last month, El Salvador bought 700 bitcoins. Prices initially fell sharply after they were adopted on Sept. 7, but rose in late September, reaching about $ 54,000 per coin this week.

A man to cryptocurrency on October 4, 2021 in San Salvador, El Salvador
A man walks past the sign next to the sign “Bitcoin is accepted here” outside a street trading rack that is accepted as a cryptocurrency payment method in San Salvador (El Salvador).

Several people told Acesparks they downloaded the wallet and received a $ 30 bonus offered by the government at the beginning of the program.

The handout material was so large that it benefited small business owners like Alexander Diaz, whose restaurant served chicken wings, and there was a sharp increase in business.

“A lot of people with this bonus wanted to try out how it was spent, so a few customers made payments to us via bitcoin,” Dias said, noting that 20% of their customers are currently using cryptocurrency. ‘he shrugged.

“Chivo has benefited small businesses because it makes the payment method easier for customers,” Dias said.

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