El Salvador, popularly known as the first country to adopt the primary crypto asset, Bitcoin, as legal tender, is currently struggling to boost the rate of Bitcoin adoption among its citizens, citing several unexpected challenges. Analysis revealed that China enjoys a better crypto adoption rate than El Salvador, as a significant number of citizens in the former own crypto wallets compared to the latter. As such, El Salvador has reportedly launched a citizenship-by-investment solution to increase the crypto adoption rate among its citizens.
According to the report, El Salvador made history when it took the bold step of announcing Bitcoin as its legal tender in 2021, embracing the versatile ecosystem of decentralized finance. However, despite the numerous initiatives, promotional campaigns, and favorable policies the government of the country established to promote the growth of cryptocurrency in the region, it proves less effective as statistics show that the rate of digital asset adoption in the country is surprisingly low.
El Salvador Records Poor Crypto Adoption Rate
Furthermore, the report showed that despite the government’s effort to legalize crypto assets, only a few Salvadorans own crypto wallets. According to statistics from a crypto analytics firm, CoinGecko, only about 1.72% of El Salvador’s population currently has BTC in their wallet. This shows that the status of BTC as legal tender in the country is yet to be fully embraced by the citizens.
In addition, the report applauds El Salvador as the only country on the surface of the earth to embrace crypto assets as legal tender. However, it also pointed out that Salvadorians have not fully adapted to the use of digital currency as evident in the low adoption rate which the country suffers.
Moreover, a statistical report from Triple-A, another analytic firm, revealed that out of the total 6.36 million people that occupy El Salvador, only about 109,175 people currently have Bitcoin in their possession. The percentage is rather too small compared to the total number of individuals in the country that use crypto for their daily transactions.
Crypto Adoption Thrives In China Than El Salvador
Meanwhile, the report further revealed that in the worldwide index for cryptocurrency adoption, El Salvador ranks 55th. This statistic indicates that the nation is still far behind other countries, such that even the ones that have implemented strict regulations on cryptocurrency are still thriving better than it.
For instance, China, whose government had placed a ban on cryptocurrency for the long term, seems to be thriving more than El Salvador, as reports revealed that about 4.08% of its population engages with digital currency. The percentage contrasts steeply with the numbers recorded for El Salvador, which had its government fully supporting cryptocurrency.
However, despite the trying times crypto adoption is facing in the country, the El Salvadoran government remains steadfast in facilitating and promoting the growth of cryptocurrency in the region. According to the report, the country recently deployed a new solution called citizenship-by-investment. This program reportedly offers citizenship and residency to people who accept to invest Bitcoin or Tether that are worth $1 million in the country.
Large-Scale Crypto Adoption Is Complex And Challenging
Meanwhile, crypto enthusiasts pointed out that the low adoption rate of crypto in the country suggests deeper societal fears and hesitation from the citizens to fully transition from a traditional economic system to a financial system based on digital currency. Furthermore, they believe that while the country may seem to rank low globally in terms of crypto adoption, the ultimate effort by the government of the nation to implement cryptocurrency into its economy would pay off in the future as the country gradually picks up momentum in the rate of crypto adoption.
However, the unexpectedly low numbers of adoption of crypto in the country did not fail to raise questions among the crypto community on the challenges surrounding the integration of crypto assets into daily transactions. El Salvador’s current issue serves as a case study, pointing out the complexities and challenges countries might face while trying to facilitate large-scale crypto adoption.
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