Adalberto Galvez, a 32-year-old construction worker, says he lost $ 220 (more than 4,800 crowns) when he tried to withdraw money from Chivo’s digital wallet. Dozens of Salvadorans shared a similar experience with a wallet named after the local term “good”. Few use this wallet daily.
“It took my money, but it didn’t return anything,” Galvez said. He has been successfully using bitcoins in another application for several months thanks to a small experimental project of bitcoin economics called Bitcoin Beach in the coastal city of El Zonte.
–
–
According to Galvez, the funds left Bitcoin Beach’s bitcoin wallet, but he could not withdraw them from Chiva. According to him, no response to the complaint came. Problems with transactions and attempts at identity theft are also reported by others. The adoption of bitcoin in this poor country, where one in five families is dependent on remittances from relatives living abroad, but in some ways was rapid.
President Nayib Bukele says 500,000 people have downloaded Chivo’s wallet more than expected. About half of the population has it. In September, it was actively used by 2.1 million of the 6.5 million inhabitants of this Latin American country. One month after its launch, it has been used by 12 percent of consumers, according to the Salvadoran Foundation for Economic and Social Development.
The foundation, which interviewed 233 businesses across sectors, found that overall utilization was still low. 93 addressed companies stated that they do not use bitcoin.
“We are still not sure what benefits the government expected,” said Leonor Selva of the National Association of Private Enterprises, one of several business groups that is skeptical about the introduction of bitcoin.
–—
Five reasons to lose everything on cryptocurrencies • VIDEO Videohub
—
Bukele’s government hopes that 2.5 million Salvadorans living in the United States will eventually send remittances, ie money earned abroad and sent to the family at home, via Chivo.
So far, 30 bitcoin ATMs have been installed in Atlanta, Chicago, Houston and Los Angeles. According to Bukele, about two million dollars (about 44 million CZK) are sent daily to Chivo’s wallet.
Recently, construction worker Juan Moz, who also lives in the United States, also chose her to send remittances to his family. He says it will save him up to $ 18 (about 397 crowns) compared to a traditional money transfer.
“I will definitely continue to use it,” Moz told Reuters in a telephone interview from San Francisco.
However, most of the annual remittances to El Salvador of six billion dollars (132 billion crowns), which is about a quarter of the country’s gross domestic product (GDP), still come through current money transfers. Many fear the sharp fluctuations in the bitcoin exchange rate.
In September, Salvador bought 700 bitcoins. Its price initially, ie after September 7, when the country introduced bitcoin, fell sharply, but by the end of September it had already risen sharply. This week it reached about $ 55,000 (1.2 million crowns) per coin.
Many Salvadorans say they withdrew their wallets and received a $ 30 bonus offered by the government at the start of the program. The news has spread enough to benefit some small business owners, such as Alexander Diaz, whose restaurant offers chicken wings.
“Most people who had this bonus wanted to try to spend it, so a few clients paid us in bitcoins,” Díaz said, adding that about 20 percent of his customers now use cryptocurrency. “Chivo has benefited small businesses because it makes it easier for clients to pay,” he added.
