Companies in El Salvador have been slow to adopt Bitcoin (BTC) since the country recognized the digital asset as legal tender in September 2021, according to a recent study by the El Salvador Chamber of Commerce.
Of the 337 companies surveyed between January 15 and February 9, only 14% said they had traded BTC since the Bitcoin law went into effect. More than 90% of companies indicated that the introduction of bitcoins in the country had little effect on their sales.
71% of the surveyed companies were micro or small enterprises, 13% were medium-sized organizations and 16% were large enterprises.
While the low adoption rate may seem devastating at first glance, El Salvador has been at the level of the US dollar since 2001. Unlike the currencies of other emerging economies, El Salvador’s underlying exchange is not subject to exchange rate fluctuations. Even under these conditions, more than one in ten companies in the country reported using bitcoin within five months.
El Salvador’s President Naib Bukele has placed Bitcoin at the center of his economic growth strategy, though institutions such as the International Monetary Fund and Moody’s Investors Service have warned against the adoption of the mainstream cryptocurrency. In January, Moody’s analyst Jaime Rocchi said Bukele’s bitcoin gambit could undermine the country’s sovereign credit outlook.
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However, El Salvador is pushing ahead with its cryptocurrency strategy by issuing $1 billion worth of Bitcoin bonds. Proceeds from the sale, also known as Volcano Bonds, will fund Bitcoin City, a fully functional city that will use geothermal energy to mine digital assets.
Bukele is set to speak at the upcoming Bitcoin 2022 conference, where he promises a “big surprise”.