He launched an NFT project called Reliquary DAO to encapsulate this mission of bringing excitement to in-person events using innovative ways to drive engagement and activation across a community by unlocking the magic of web3 tools.
The results show that after the initial big push from the government of El Salvador to encourage its citizens to begin using this new financial system, enthusiasm and adoption are lackluster.
El Salvador’s currency since 2001 has been the US dollar, which makes them completely dependent on the United States to formulate their monetary policy.
To facilitate this new system, the Salvadoran government also launched an app called the “Chivo Wallet,” which allows users to digitally trade both Bitcoin and dollars over the Lightning Network, a layer 2 solution for quick and cheap peer-to-peer payments using the Bitcoin blockchain network as the foundation.
The data on El Salvador’s Bitcoin strategy is significant because it allows us to see what happens when a country decides to deploy cryptocurrency at a national level.
Bitcoin’s use as legal tender and its associated rollout in El Salvador isn’t going as well as they hoped it would go.
Out of all sales, only 5% were conducted in Bitcoin and most transactions were converted to dollars within the Chivo Wallet upon receipt of payment.
When it first launched, there were problems with registration and the identity verification process.
The survey reveals that 68% of people know about the existence of the app and of those 78% of those who had heard of it downloaded or attempted to download it with the help of family or friends.
The fourth most frequent reason mentioned was not owning a phone with the internet, followed by the technology being complicated.
When El Salvadorans do use the Chivo Wallet, they tend to transact in US dollars because the volatility of Bitcoin is seen as a liability to them.
Anecdotal evidence suggests that the app is used by a subset of the population like street vendors as a cash replacement because it’s convenient for small peer-to-peer payments.
When you download the Chivo Wallet, you have to complete an identity verification process commonly referred to in the industry as Know Your Customer or KYC.
However, the study shows that only 3% of people reported receiving remittances in Bitcoin and only 8% in US dollars using the Chivo Wallet.
About 70% of the population of El Salvador is unbanked, meaning they don’t maintain a regular bank account or have access to typical banking services.
Sometimes it could take an hour or more on a bus to visit a bank on their day off to cash their checks.
For many El Salvadorans, this is the first time they have encountered the ability to have banking services like a savings account.
A major hiccup was that the government’s top down decision surprised and confused the population with little warning which only exacerbated issues with their roll out.
El Salvadorans are accustomed to an anonymous cash economy expressed in US dollars and many don’t trust the new technology, especially after a botched launch with many technical issues with the Chivo Wallet.
In a country that is highly unbanked, the ability to include more people into the financial system and reduce friction for workers getting paid is a major benefit that should be acknowledged despite the clunkiness of the approach.