Current State of Bitcoin Service Providers in El Salvador
Recent statistics from El Salvador’s Central Reserve Bank reveal a troubling reality for the nation’s bitcoin service landscape: only 20 out of 181 registered bitcoin service providers (BSPs) are functioning. Among these providers is Chivo, the government-sanctioned cryptocurrency wallet, which is set to be discontinued as part of the terms agreed upon with the International Monetary Fund (IMF).
Public Sentiment Towards Bitcoin
Despite being one of the pioneering nations to embrace bitcoin and cryptocurrency businesses, it appears public enthusiasm has significantly dwindled. Reports suggest that many residents of El Salvador find little practical use for these bitcoin services, a sentiment echoed by the stark disparity between the number of those who registered to be providers and those that remained active.
Out of the registered BSPs, a significant 161 have been classified as “not operating”, indicating an initial surge of interest that quickly faded into indifference. Furthermore, 22 of these inactive entities have not met compliance requirements as per the established guidelines of the nation’s bitcoin legislation, which mandates that providers maintain high standards of integrity and adhere to all regulatory statutes.
Government Achievements and Reactions
While the Salvadoran government has celebrated some macroeconomic achievements, such as attracting Tether, a major player in the stablecoin market, President Nayib Bukele has openly expressed disappointment regarding the public’s uptake of bitcoin.
The anticipated benefits of using cryptocurrency for remittances have also failed to materialize, with fewer than 1% of transactions utilizing crypto channels. In August, Bukele acknowledged the role bitcoin played in rebranding El Salvador on the world stage, crediting it with attracting investment and tourism, despite the lack of local adoption.
