Transfers in bitcoin and other cryptocurrencies sent to El Salvador fell 17.8% in the first two months of 2023 compared to 2022, according to the latest data published by the country’s Central Reserve Bank (BCR) published by Agencia EFE.
according to statementEl Salvador received a total of $15.98 million in cryptocurrency transfers. This amount represents a decrease of $3.47 million compared to the same period during the previous year when the country recorded more than $19.45 million in cryptocurrency transfers.
Cryptocurrency transfers account for 1.34% of the total amounts received.
According to BCR information, transfers received through cryptocurrencies account for only 1.34% of the total received by the country, which as of the latest report amounted to nearly $1.2 billion.
Although the percentage decrease in remittances over the past two months was almost 20% compared to 2022, the truth is that since the introduction of the Bitcoin law, the use of cryptocurrencies in international transactions has not significantly affected the Salvadoran economy. Most Salvadorans send money using traditional services, and the amount of money they send is pretty much the same.
During 2022, more than $7 billion in remittances were sent to the Central American country; However, only $126 million was sent using cryptocurrency, according for the Latin press.
This shows that the economic policy around bitcoin proposed by President Neb Bokel has not resonated with Salvadorans, as the vast majority still prefer cash services to cryptocurrency-powered options despite higher transaction costs and many other drawbacks.
One of the most likely reasons cited by many experts is the lack of crypto education in the population. When Bukele promoted Bitcoin to advertise BTC as fiat, Salvadorans didn’t know what cryptocurrency really was, how to use it, or the benefits it offered.
Benefits of Bitcoin Law in El Salvador
Bitcoin law may have limited impact on the remittance industry, but there is one area that is thriving thanks to Bukele’s love of cryptocurrency: tourism and foreign investment.
Bukele stated that tourism in El Salvador has increased by 95% since the implementation of the Bitcoin Law. Moreover, the president said during an interview that “there are many bitcoin makers who would like to go to the country where bitcoin is legal tender.”
Likewise, El Salvador’s Minister of Tourism, Morena Valdez, stated at the beginning of 2022 that the country has become an attractive destination for Americans, who account for 60% of all visits. The president also cited it as a way to promote his fight against organized crime.
On the other hand, the President’s enthusiasm for Bitcoin has helped him establish relationships with pro-Bitcoin US politicians such as Jose “Joe” Esparza, Texas Deputy Secretary of State, with whom he is discussing opening a second Bitcoin embassy, as well as expanding other economic and trade exchange projects.
He has also established relationships with major crypto influencers such as Max Keizer, Stacy Herbert, Ray Youssef and Jack Malers, which could help inject more money into the local industry and bring more dynamism to the country’s economy.
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