Chivo not so popular? This is the impression that emerges from a recent study on the El Salvador government’s Bitcoin wallet. It seems that most users stop using it once the BTC bonus has been recovered
Chivo, the leader in Bitcoin adoption
Remember: Late last year, as El Salvador’s adoption of Bitcoin (BTC) made headlines, the government boasted that it had managed to attract a wave of new users. This was thanks to a nationally created wallet: Chivo. According to President Nayib Bukele, a third of Salvadorans were actively using the wallet just three weeks after its launch:
2.1 million Salvadorans are ACTIVELY USING @chivowallet (not downloads).
Chivo is not a bank, but in less than 3 weeks, it now has more users than any bank in El Salvador and is moving fast to have more users that ALL BANKS IN EL SALVADOR combined.
This is wild! Bitcoin
– Nayib Bukele (@nayibbukele) September 25, 2021
It must be said that the government of El Salvador had left a bait in its application: any adult installing it automatically received $30 in BTC. That’s a lot of money in the country, which is suffering from high inflation.
El Salvador’s Bitcoin wallet has lost many users
But it seems that this was not enough to attract users in a big way. That’s according to a new report from the US National Bureau of Economic Research. According to it, the majority of wallet users do not show particularly high activity:
Most users who have used Chivo after spending the $30 bonus don’t interact much with the app. The average user has not made any withdrawals from ATMs, and no payments have been sent or received for a month. “
The El Salvador government’s portfolio was also intended to allow citizens living abroad to transfer funds to the country in a flexible and inexpensive way. A significant part of the country’s GDP is based on remittances from the diaspora.
But here too, Chivo seems to have slipped, again according to the report:
“In the first quarter of 2022, we are seeing almost no new users, and the share of cross-border Bitcoin remittances is at its lowest point since Chivo’s launch.”
We would mitigate this point, however: as a reminder, the Chivo wallet was only made available to European users at the end of February 2022. It is therefore difficult to draw a conclusion on the whole quarter.
Not so easy to adopt
The fact remains that despite the enthusiastic statements of the country’s highly communicative president, it would seem that El Salvador’s adoption of Bitcoin is more measured than expected. It must be said that Chivo has encountered some successive difficulties in recent months: several users reported scams, for example.
There is also a more global logic. President Bukele decided almost unilaterally to adopt BTC, and things have moved very quickly in El Salvador over the past year. But “substantive” adoption takes time, so it’s not surprising that the trend has largely died down after the initial enthusiasm.
