Since El Salvador adopted Bitcoin as legal tender and provided all citizens with an initial ~$30USD worth of Bitcoin, the world has been watching to see how adoption and economic effects unfold. We have developed relationships with the real people in El Salvador for years, and this was the perfect opportunity to investigate the operational aspects of the rollout and usage for ourselves.
It is notable that within a few months of launching this initiative, the percentage of citizens with an active Bitcoin wallet (named Chivo) already surpassed those that have bank accounts. This in itself is an important note. Previous to this, in order to send remittance payments to anyone in El Salvador, the process went something like this:
- Know someone in El Salvador who knows and trusts someone with a bank account that is willing to help them.
- Know someone in the U.S. who the person with the bank account in El Salvador trusts to share their bank account information with.
- Send money to the U.S. contact.
- U.S. contact sends to El Salvador contact with bank account.
- Two people in El Salvador get together to receive the money and transfer the cash to the final recipient.
There is a lot that can go wrong in that above scenario and it takes a long time. With Chivo and Bitcoin, it is now as easy as obtaining the receiving BTC address and sending BTC to it. The entire process is finished within a half an hour and fees and labor are infinitely less than the previous scenario.
A few things to note from our tests:
- Be sure to get the recipient’s CURRENT bitcoin address from their Chivo wallet before sending. Why? This is always good practice for any crypto transaction, but in particular with such a new wallet like Chivo, there have been problems. In fact, we sent a second payment to the same Chivo address, and it never arrived to the intended recipient because unbeknownst to both parties, the Chivo wallet address for BTC had changed. So that payment went to someone else or is lost forever. Always check for the current address before sending.
- Decide before you send if the recipient wants the funds to be automatically converted to USD or kept in BTC. The default setting in Chivo is convert to USD, so have the recipient change it if they prefer to keep their BTC (almost always a better option!).
Here are some screenshots of the process if you’d like to see Chivo in action, the user interface, and the much appreciated result. If you have any business ideas on how we can do more work to help with crypto adoption in El Salvador, please write in to let us know!
