A visual look at the impact of El Salvador's decision to make Bitcoin legal tender.
As the first country to adopt Bitcoin as legal tender, El Salvador is widely thought of as the proving grounds for cryptocurrencies as potentially transformative financial instruments and means of exchange on a mass scale, although this decision was not without debate.
As part of its plans to support Bitcoin, businesses were mandated to begin accepting Bitcoin, and Salvadorans were provided with a $30 bonus through the government's 'Chivo' wallet. This was aimed at incentivizing Bitcoin adoption and help the 4.5M unbanked citizens access crucial financial services.
According to the latest data, more than 60% of the population downloaded the Chivo wallet — and 70% of the unbanked population were onboarded. Despite these impressive numbers, just 40% of users continued using the wallet after spending their $30 bonus.
Data from the National Bureau of Economic Research's report finds that while two-thirds of Salvadorans know about Chivo, few people actually use it to receive and send remittances or make tax payments.
As a lightning network-enabled wallet, Chivo has helped drive the adoption of the Bitcoin scaling solution and increase its capacity. As a result, El Salvador is now the most prolific country for lightning usage — exceeding both Brazil and Nigeria combined.