El Salvador struggles to accept bitcoin despite government pressure – The Defiant

Each country crypto separately.

El Salvador’s government has encouraged the use of bitcoin, where the Argentine crypto boom is largely organic. The two routes – top-down and bottom-up – are quite different in their approach and results.

It is too early to say which method has the best potential for long-term success, but so far, the bottom-up method seems to be working better for crypto adoption in a country.

Top-down: El Salvador

When El Salvador created bitcoin legal tender, all businesses were forced to accept BTC for payment. To encourage the acceptance of bitcoin, the Salvadoran government has released a custodial digital wallet, offering its users $ 30 free bitcoin and a subsidized transaction fee.

Despite this incentive, researchers at the University of Chicago found that only 4.9% of all El Salvador’s sales were conducted in Bitcoin. Researchers also found that 88% of business Bitcoin revenue was exchanged for Fiat currency.

“You can’t just replace one aspect of a financial system and expect success,” Messin analyst Dustin Tender told The Defiant. “Every piece [of the financial system] El Salvador is battling a relatively high crime rate, natural disasters and rising poverty rates, according to the World Bank.

Researchers found that the primary users of Bitcoin in El Salvador were young, educated men, and about 90% of the surveyed population did not use mobile banking.

“Overall, despite the legal tender status of Bitcoin and the huge incentives implemented by the government, cryptocurrency is not essentially a recognized means of exchange in El Salvador,” the author writes.

President Naib Buckle is pushing for that to change. He announced in November that the government was planning to build a ‘Bitcoin City’ at the foot of the Conchagua volcano. “The idea is that the local economy will run on bitcoin, and the city will be powered by geothermal energy from volcanoes,” wrote Laurie Clark from MIT Technology Review.

Many aren’t sure if the plan is successful for Bitcoin City. Johns Hopkins economist Steve Hank Tweet That Bitcoin City is “an irrational stunt by a political dictator” and in response to El Salvador’s crime problem, Tweet “Buckle is very busy designing Bitcoin City to fight crime.”

Bottom-up: Argentina

According to the National Institute of Statistics and Census (INDEC), Argentina’s inflation rate reached a multi-decade high of 6.7% in March, hitting an annual inflation rate of 55.1%. With rising inflation over the years, there has been a grassroots movement surrounding crypto.

Argentina was ranked 10th in the 2021 Global Crypto Adoption Index by ChanelLais, an index that influenced the amount of chain value received, on-chain retail price received and peer-to-peer exchange trading volume. An annual Ethereum conference, ETHBuenosAires, has been hosted in Argentina since 2018.

On May 2, Banco Galicia, Argentina’s largest private bank, added a feature to their app for users to buy Bitcoin, Etherium, USDC and XRP. Within a week, the government retaliated. On May 7, Argentina’s central bank banned banks from offering unregulated services for digital assets.

Despite the ban, Argentines are free to hedge their bets against inflated pesos and to invest in cryptocurrencies through decentralized exchanges. CoinDesk reports that in Argentina alone, the crypto exchange Lemon has attracted one million users and the 6-month-old Bello has surpassed 170,000 users.

United States

Although companies such as Coinbase and Opency have been established in the United States, crypto adoption in the United States has certainly been a struggle. One thing that has accelerated adoption is rising consumer prices – inflation.

According to the Bureau of Labor Statistics, inflation rose 8.5% for the period from March 2021 to March 2022. This was the largest 12-month advance since December 1981.

The United States ranked 8th in the 2021 Global Crypto Adoption Index of Chanellysis. In November, Pew Research reported that 16% of Americans said they had invested, traded or used crypto. About nine to ten Americans say they have heard at least a little bit about crypto.

Lately, the main focus of US regulatory agencies has been Stablecoin. After Terre’s dissolution earlier this month, U.S. Treasury Secretary Janet Yellen said it was “urgent” for Congress to pass new legislation to control stablecoin.

In the United States, cryptocurrencies are built without government incentives. In fact, it was fueled by businesses and individuals, despite government monetary policy, outdated securities laws, and confusing tax policies.

For continued growth, Meseri’s tender feels the infrastructure needs to be expanded. “It means merchant apps, payments, e-commerce, etc .. We’re still one way to be honest but closer to what you think.”

The bottom-up approach in America and Argentina may be one of the reasons that everyone from your brother to grandma is talking about crypto – everyone is involved, only the government is not putting pressure on its people.

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