Crypto remittances to El Salvador decreased by 18% in early 2023
Remittances in Bitcoin and other cryptocurrencies sent to El Salvador fell 17.8% in the first two months of 2023 compared to 2022, according to recent data published by the country’s central bank (BCR) reported by Agencia EFE.
According to the statement, El Salvador received a total of $15.98 million in remittances via cryptocurrencies. This amount represents a decrease of $3.47 million compared to the same period last year when the country recorded over $19.45 million in crypto transfers.
Crypto remittances accounted for 1.34% of total received.
According to BCR information, transfers received through cryptocurrencies represented only 1.34% of the total received by the country, which until the last report amounted to almost 1.2 billion dollars.
Although the percentage drop in remittances over the past two months was almost 20% compared to 2022, the truth is that since the implementation of the Bitcoin Law, the use of cryptocurrencies for international transactions has not significantly affected Salvador’s economy. Most Salvadorans send money using traditional services, and the amount they send is mostly the same.
During 2022, more than $7 billion in remittances were sent to the Central American country; However, only $126 million was sent using cryptocurrencies, according to Prensa Latina.
This shows that the economic policy around Bitcoin proposed by President Nayib Bukele has not yet resonated with Salvadorans, as the vast majority still prefer fiat services to crypto-powered alternatives despite high transaction costs and many other drawbacks.
One of the most likely reasons pointed out by many experts is the lack of crypto education among the population. When Bukele promoted the Bitcoin Act to declare BTC as legal currency, Salvadorans did not know what the cryptocurrency actually was, how to use it or what benefits it provided.
Benefits of Bitcoin Law in El Salvador
The Bitcoin law may have a limited impact on the money transfer industry, but it’s a field that’s booming thanks to Bukele’s love of crypto: tourism and foreign investment.
Bukele stated that tourism in El Salvador has increased by 95% since the implementation of the Bitcoin law. Moreover, the president said during an interview that “there are many bitcoiners who want to go to the country where bitcoin is legal tender.”
Similarly, El Salvador’s Minister of Tourism, Morena Valdez, stated in early 2022 that the country has become an attractive destination for Americans, representing 60% of total visits. This has also been pointed out by the president as a way to advance his war on organized crime.
On the other hand, the president’s enthusiasm for Bitcoin has helped him establish relationships with pro-bitcoin US politicians such as José “Joe” Esparza, Deputy Secretary of State of Texas, with whom he is also discussing the opening of a second Bitcoin embassy. as an extension of other economic and trade exchange projects.
He has also established ties with major crypto influencers such as Max Keiser, Stacy Herbert, Ray Youssef and Jack Mallers, who could potentially help inject more money into the local industry and bring more dynamism to the country’s economy.
