Bitcoin (BTC) has been used by 14 percent of Salvadoran enterprises. In September 2021, El Salvador made history by becoming the first country to recognize Bitcoin as legal money.
According to a recent poll by the Salvadoran Chamber of Commerce, businesses in El Salvador have been hesitant to adopt Bitcoin (BTC) after the government publicly approved the digital asset as legal cash in September 2021.
Only 14 percent of the 337 businesses polled between Jan. 15 and Feb. 9 claimed they had transacted with Bitcoin since the law took effect. Over 90% of the businesses said that the acceptance of Bitcoin in the country had no influence on their sales.
Seventy-one percent of the Salvadoran businesses questioned were micro or small businesses, thirteen percent were medium-sized businesses, and sixteen percent were large businesses.
While the low acceptance percentage may appear unimpressive at first glance, El Salvador has been using the US dollar as its official currency since 2001. El Salvador’s major medium of exchange, unlike the currencies of other emerging nations, is not subject to exchange-rate volatility. Despite this, over one-in-ten firms in the country reported using Bitcoin over a five-month period.
Even while agencies like the International Monetary Fund and Moody’s Investors Service have warned against embracing Bitcoin, Salvadoran President Nayib Bukele has placed it near the core of his economic growth strategy. Bukele’s Bitcoin gamble, according to Moody’s analyst Jaime Reusche, could jeopardize his country’s sovereign credit stance.
El Salvador, on the other hand, is pressing forward with its crypto strategy by issuing $1 billion in Bitcoin bonds. The revenues of the sale, also known as Volcano Bonds, will be used to fund Bitcoin City, a fully functional city that will mine the digital asset using geothermal energy.
Bukele will be speaking at the Bitcoin 2022 conference, where he has promised a “big surprise.”
Also Read: El Salvador may Postpone the Issuance of a Bitcoin Bond due to Concerns over the Russia-Ukraine Conflict
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