According to recent data issued by the country's Central Reserve Bank (BCR) and cited by Agencia EFE, remittances in bitcoin and other cryptocurrencies transferred to El Salvador declined by 17.8% during the first two months of 2023 compared to 2022.
El Salvador received a total of $15.98 million in cryptocurrency remittances, according to the statement. This is a $3.47 million decline from the same period last year, when the country received over $19.45 million in crypto remittances.
Crypto remittances accounted for 1.34% of the total received.
According to BCR Information, cryptocurrency remittances account for only 1.34% of total remittances received by the country, which totaled $1.2 billion as per the most recent report.
Although the percentage decline in remittances over the last two months was about 20% compared to 2022, the truth is that the usage of cryptocurrency for international transactions has had no substantial impact on the Salvadoran economy since the enactment of the Bitcoin Law. The majority of Salvadorans send money through traditional methods, and the quantity sent is nearly the same.
More than $7 billion in remittances will be transmitted to the Central American country by 2022, but just $126 million will be sent via cryptocurrencies, according to For Prens Latina.
This demonstrates that President Nayib Bukele's proposed economic policy around Bitcoin has not yet resonated with Salvadorans, since the clear majority still chooses fiat services over crypto-powered options, despite high transaction prices and several other disadvantages.
Many experts believe that one of the most plausible explanations is a lack of crypto education among the general people. When Bukele proposed the Bitcoin bill, which would make BTC legal tender, Salvadorans had no idea what the cryptocurrency was, how to use it, or what benefits it provided.
Benefits of Bitcoin Law in El Salvador
The bitcoin law may have had little impact on the remittance industry, but one industry is thriving as a result of Bukele's crypto obsession: tourism and foreign investment.
According to Bukele, tourism in El Salvador has surged by 95% since the bitcoin law was implemented. Furthermore, during an interview, the president stated that "there are many bitcoiners who want to move to a country where bitcoin is legal tender."
Similarly, Murray Valdez, El Salvador's tourism minister, stated in early 2022 that the country has become an appealing destination for Americans, who account for 60% of total trips. The President has also mentioned it as a means of highlighting his war on organized crime.
On the other hand, the president's excitement for bitcoin has helped him create ties with pro-bitcoin US politicians such as Texas deputy secretary of state Jose "Joe" Esparza, with whom he is also contemplating the establishment of a second bitcoin embassy. As a continuation of past economic and commercial exchange ventures.
He has also formed contacts with prominent crypto influencers such as Max Kaiser, Stacey Herbert, Ray Joseph, and Jack Mollers, which might help pump more money into the local business and boost the country's economy.
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source: cryptopotato.com
