El Salvador Weekly: What Are Bitcoin ATMs Disappearing?

El Salvador’s finance minister, Alejandro Zelaya, said on August 11 that “the Salvadoran population continues to use Bitcoin and the Chivo wallet,” in the words of a local news outlet.

Which led ElSalvador.com to suggest that his statement “may be far from the truth” as a growing number of businesses around San Salvador have pulled “Bitcoin Accepted” signs from their windows in recent months.

Despite large paper losses on the bitcoin investment since the beginning of the crypto market,

Zelaya said the Bitcoin law “is a bet for the future,” adding “El Salvador’s commitment to the use of Bitcoin and the Chivo Wallet is a strong commitment, there are still many steps to be taken.”

However, Zelaya also denied rumors that the Bitcoin ATMs that the government installed around the capital have been removed. The finance minister said they are “completely false”, adding that the empty ATMs are simply the result of a relocation order from San Salvador’s mayor.

In addition, the same outlet reported that nearly a year after President Nayib Bukele’s law made bitcoin a national legal tender alongside the US dollar, there is little sign of bitcoin being used on a daily basis.

Citing central bank data, ElSalvador.com said on August 15 that from September to June, only $120.5 million entered the country through Chivo’s cryptocurrency wallets, which began at a high of $29.7 million in October but then shrank to less than 20 million dollars per month. ever since.

The peak in that time period was May, with $15.6 million received by digital wallets — an increase the outlet said could have been related to Mother’s Day more than increased interest in sending bitcoin remittances — adding that the central bank noted that it could not say how much of this came through Chivo, unlike other digital wallets.

It noted that an April survey by the US National Bureau of Economic Research found that only 20% of the population still uses the Chivo wallet.

“The main reason for not downloading the app” it found, “is that users prefer to use cash, which was followed by trust issues: Respondents did not trust the system or Bitcoin itself.”

Bond Bounce

In late July, Simon Weaver, Morgan Stanley’s global head of emerging markets credit strategy, advised clients to buy El Salvador’s bonds, saying that while deep in junk territory and risky, at 28 cents on the dollar they were overpriced for risk. i. There may be something to it, as the price index jumped to 36.8 cents.

Entering the country

Diario El Salvador profiled a success of the Salvadoran bitcoin experiment, looking at a cryptocurrency company setting up shop in the country as a result.

Financial services firm Structure.fi opened an office in the country on August 11, offering exchange services, cryptoloan investment and loan services, and the ability to make or receive payments, the company said in a press release.

Cristian Flores, Presidential Commissioner for Strategic Projects, Embracing Decentralized Financial Firms (DeFi), said that the Bitcoin law allows the offer of Salvadorans access to state-of-the-art crypto services.

“We are very excited to see how new companies are coming to the country to offer services and tools that allow more investors to access new opportunities to venture with their capital in El Salvador,” Flores said in the release.

According to the central bank, more than 50 bitcoin service providers have established themselves in the country.

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