El Salvador made history in 2021 by becoming the first country in the world to adopt Bitcoin as legal tender. However, one year after this milestone, BTC adoption in the Central American country does not live up to expectations.
According to a recent CoinGecko report, only 1.72% of the population of El Salvador currently owns Bitcoin. This indicates that, despite being pioneers in integrating Bitcoin into their economy, the majority of Salvadorans have not yet adopted the cryptocurrency.
Comparatively, China, which banned cryptocurrencies on its territory, has around 4.08% of its population holding digital assets. This difference is surprising, as El Salvador relies on government support to promote the use of BTC.
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Additionally, El Salvador ranks a modest 55th in the global cryptocurrency adoption index, showing that the country lags behind many nations, even those that have enforced restrictions on cryptocurrencies.
In an attempt to boost adoption, the Salvadoran government recently launched a citizenship by investment program. This program offers residency and citizenship to individuals who invest 1 million dollars in Bitcoin or Tether in the country.
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However, El Salvador’s low Bitcoin adoption rate reflects deeper challenges, including the population’s reluctance to fully transition to a cryptocurrency-based economy. While the country’s current ranking in global cryptocurrency adoption may seem disappointing, the government’s proactive measures could, over time, lead to a gradual increase in adoption.
This situation in El Salvador serves as a valuable case study, highlighting the complexities and obstacles that nations can face when trying to widely adopt cryptocurrencies. As the country continues its efforts, the world is closely watching how the integration of Bitcoin into a national economy might evolve and what lessons can be learned from this experience.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.