A year after El Salvador made Bitcoin legal tender and required all businesses to accept it, the experiment has failed due to falling cryptocurrency prices and a lack of use of the government’s Chivo e-wallet app to buy goods or send money.<\/p>\n
Nor is the cryptocurrency city proposed by President Nayib Bukele, which offered itself as a tax haven for crypto investors and miners, to be found anywhere, owing to the postponement of the issuance of the “Bitcoin Bond,” that was supposed to support construction.<\/p>\n
When El Salvador legalized bitcoin on September 7, 2021, it was worth about $47,000. A year later, it is worth less than half what it was, and it is now worth about $19,770, which is one of the reasons why El Salvador’s plan failed.<\/p>\n
Salvadoran officials have justified the purchase of 2,381 Bitcoins on the grounds that it is a long-term plan that has influenced investment, reduced bank commissions to zero, improved tourism, and promoted financial inclusion.<\/p>\n
Bitcoin seems alien to Salvadorans, with only 20% of 1,800 Salvadoran households using it for transactions. Even after spending the $30 in free credit the government provides to promote its use, only 20% of Salvadorans use the Chivo app.<\/p>\n