This article is from es.cointelegraph.com and the original article can be read here
El Salvador’s government-backed bitcoin (BTC) wallet has achieved significant success in terms of adoption, according to an executive at the crypto exchange behind the wallet.
The Chivo wallet was launched in conjunction with BTC becoming legal tender in El Salvador on September 7, 2021. The official platform allows users to buy and sell bitcoin, offering cryptocurrency exchange and custody services provided by Mexican cryptocurrency trading platform Bitso.
Bitso essentially provides back-end technology so that the Salvadoran government can buy bitcoin and ensure that BTC is convertible to the US dollar. Bitso head of corporate and regulatory affairs Felipe, Vallejo, told Cointelegraph on Friday.
“Since it began working with the government in September, Bitso has continued to provide liquidity to the Chivo wallet,” Vallejo said. He added that Bitso began operating in El Salvador through Chivo and is currently present in the country only through that platform. However, the exchange is active in Mexico, Brazil, Argentina and Colombia.
According to Vallejo, Chivo has achieved great success in the seven months since its somewhat bumpy launch when the wallet faced technical problems and even disconnected.
“Through our work with the Chivo wallet we have been able to verify how an important part of the population has used the application to carry out safe and simple transactions” Vallejo said. He referred to a study by the US National Bureau of Economic Research which determined that 40% of those who downloaded the Chivo wallet have continued to use it after receiving their government incentives. He claimed:
“We think this is a relatively strong sign of adoption. As cryptocurrency education and everyday use cases grow in the region, more users will stay on the app with a deeper understanding of the technology and the opportunities it creates.”
Vallejo said that 20% of Salvadorans continued to use the Chivo wallet after spending their free $30 BTC bonus. This should be seen as a “strong sign of growing adoption”, especially when compared to the adoption of traditional financial services in El Salvador. According to some sources, only 29% of adults in El Salvador had bank accounts from 2017.
Furthermore, 70% of El Salvador’s population doesn’t have a bank account and work in the informal economy.
Financial inclusion is not only a moral imperative, but also a way to grow the country’s economy, providing access to credit, savings, investment and secure transactions.
– Nayib Bukele (@nayibbukele) June 6, 2021
The executive also highlighted the strength of Chivo’s adoption against other cryptocurrency exchanges. El Salvador, a country with 6.49 million citizens, has 2.6 million Chivo users, Vallejo said, adding that some major global exchanges like Coinbase had 11.4 million active users in total until the fourth quarter of 2021.
Bitso and Chivo hope to increase the adoption rate by educating people about crypto and blockchain. “The main barrier to the adoption of cryptocurrencies, both in Latin America and globally, is education. As we continue to provide Salvadorans with the information and tools to better understand and use innovative technology, we anticipate an increase in adoption rates” Vallejo said. He mentioned that Bitso has also participated in education efforts in Argentina, Chile, Colombia, Mexico, Peru and Uruguay.