Investigators provide insights: El Salvador's cryptocurrency wallet is lacking
The Chivo wallet, which represents El Salvador's official Bitcoin initiative, has been struggling to gain traction. A study by the National Bureau of Economic Research revealed that out of 1,800 households surveyed, only a small fraction continue to utilize the wallet, particularly in areas known for crypto tourism where many have opted for alternative wallets instead.
The researchers documented their observations in a publication paper titled “Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador.”
Fernando Álvarez, one of the study's authors and an economist at the University of Chicago, remarked, “This is unprecedented; there has never been an instance where currency was adopted with such strong incentives and still failed.” RestOfWorld .
When Chivo was initially launched in September 2021, users received approximately $30 in cryptocurrency as an incentive for signing up. According to the researchers, while many users did activate their wallets and withdraw their funds, around 20% of survey participants stated they still use the app to reduce reliance on traditional cash.
Additionally, misleading statements from the government have led users to believe that the Chivo wallet is risky. For instance, a recent article suggested that rather than holding U.S. dollars, Chivo was storing tokens instead. While this might be clear to those familiar with blockchain technology, it has evidently confused most users. El Faro “Chivo is off the table for me,” expressed Carolina Reyes, a local snack shop owner, to RestOfWorld. “I don’t trust it’s safe, so I steer clear.”
There have been cases where users who downloaded Chivo just for the bonuses ended up having their identities compromised and their wallets drained.
Reyes was one of over a thousand people Accused scammer returns smart contract keys to the CryptoPhunks community
Photo by Esaú González on Unsplash
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In line with the Trust Project guidelines John Biggs is an entrepreneur, consultant, and writer with extensive experience. With fifteen years as an editor at influential outlets like Gizmodo, CrunchGear, and TechCrunch, he possesses a rich background in hardware startups, 3D printing, and blockchain innovations. His articles have been featured in publications including Men’s Health, Wired, and the New York Times.
