On June 9th, 2021, El Salvador’s government published the legislation making the digital currency Bitcoin legal tender within the country. The Regulation became effective on September 8th. Since 2001, the country has used the U.S. dollar as its currency. Now, President Nayib Bukele is promoting crypto-friendliness to spur travel and investment.
Michael McDonald, a Bloomberg reporter for Central America & Caribbean, took a journey to the country to conduct an experiment by paying his bills in cryptocurrency only.
Right from the start, it was bad luck. It turned out that Chivo, El Salvador’s Bitcoin-processing system, wasn’t ready to process the operation. Its point-of-sale device wasn’t working due to bad internet signal, so the author failed to play by his own rules and paid by card the $12 entry fee. Looking ahead, it wasn’t an isolated incident.
By and large, there were three scenarios. First, people would shy away when hear anything Bitcoinwise. The second reaction is being sorry about some technical problems that make it impossible to carry out a crypto transaction. The third outcome, the most wanted one, makes both the seller and the buyer excited about the magic that just happened when the phone’s screen turns green with a check mark and Bitcoin payment is sent.
However, even if both sides of the trade found common ground in cryptocurrency, that’s not necessarily the key to success. The reporter notes that there are far more obstacles than meets the eye. The most crucial one is the payment processing time that could take up to 24 hours. Another disadvantage marked by the author is the high cost of Bitcoin fees, such as levies for transferring the currency between Coinbase and the digital wallet.
All in all, only 10 of almost 50 businesses had taken Bitcoin, amounting to $485 out of $1,700 Michael has spent. And only four crypto transactions had gone off without a hitch. This experience coincides with a recent Chamber of Commerce survey of 337 businesses, where only 14% of them had transacted in Bitcoin since September.