According to a working study published by the U.S. National Bureau of Economic Research (NBER), most Salvadorans stopped using the Chivo wallet after getting their $30 bitcoin bonus. The report shows that the median Chivo wallet user made no deposits or withdrawals in a given month.
“The elasticity of substitution between Chivo Wallet and other methods of payment seems to be large,” the study adds. “On net, among Chivo Wallet users, 10% report spending less in cash, and 11% report reducing their use of debit or credit cards since they downloaded Chivo.”
Unfortunately, despite all the reporting that says otherwise, NBER’s study claims only 20% of Salvadoran businesses reported on accepting bitcoin as a medium of exchange. 90% of those businesses were enterprises and “88% of businesses transform money from sales in bitcoin into dollars.” NBER’s findings further note that roughly 5% of Salvadorans paid their tax obligations via bitcoin (BTC).
“Overall, despite the legal tender status of bitcoin and the large incentives implemented by the government, the cryptocurrency is largely not an accepted medium of exchange in El Salvador,” the NBER research paper concludes.
What do you think about the NBER’s study and findings among the 1,800 Salvadoran households? Let us know what you think about this subject in the comments section below.