Some Salvadorans responded to their country’s adoption of as legal tender by setting Bitcoin ATMs on fire and chanting “No to Bitcoin” and “Respect the Constitution” in the streets. Some were worried about the new digital currency’s instability and uncertainty around crypto, while other citizens viewed Bitcoin as a path to financial freedom.

This article shares the opinion of Diego Cerritos, a 25-year-old marketing specialist from San Salvador, the capital city, who has been observing the changes and people’s reactions to Bitcoin in his home country. Diego spoke exclusively to DailyCoin about how Bitcoin was adopted in El Salvador and its use over the past few months.

Bitcoin as a Daily Payment

The Chivo app is the most used and probably the only wallet that works on a daily basis in El Salvador, since it has zero fees, and transactions are instant (although it doesn’t use blockchain).

There are Chivo ATMs all over the country, so it’s rather easy to convert USD to Bitcoin and vice versa. Chivo POS (PIN Pad) is also used by many businesses. It works in the exact same manner as a mobile wallet and can be used for business purposes.

“I’ve been buying some groceries with Bitcoin, although it’s still more convenient to pay in cash. Some store workers are still learning to use the wallet and POS systems. The overall process of paying with Bitcoin is faster than using a credit card but still slower than with cash,”
Diego was added.

However, fees should be included in any lightning network. Fees can make a $8 grocery purchase cost $10. Additionally, higher fees can result in a more efficient transaction. The Chivo app, an official wallet that accepts USD and Bitcoin, has been essential for anyone who uses Bitcoin as a currency.

Users can make payments instantly between Chivo app apps as long they don’t charge fees. It doesn’t matter if they use USD or Bitcoin, and this means that the Chivo app doesn’t use blockchain at all. When users wish to use Chivo’s app with other wallets (Muun and Coinomi), or by layer-1 or lightning network, problems can arise.

Diego said that users should contact Chivo customer care if they have any problems with a Chivo transaction to an external wallet. This is because the money they sent does not enter the blockchain network.

A lack of knowledge is a problem

Most people didn’t know about cryptocurrencies before, and it was difficult to convert Bitcoin to El Salvador’s currency (USD). With the Bitcoin law now, crypto is easier to access, but it’s going to take some time before most people can understand it and start using it.

“I think there are some opportunities for crypto to bloom in El Salvador, although it will require a proper fundamental plan, not just a random way to spend money,”
Diego said.

Except for the Chivo wallet, there aren’t any government-funded projects that educate people about cryptocurrency. Although there are some initiatives by individuals, the best way to get started is searching the web, looking at videos and gradually understanding the basics.

“Are people interested in learning about crypto? No. From my perspective, most people will only learn how to use the Chivo app and that’s it.”

Bitcoin payments are not paid to anyone

Right now, it’s illegal to pay employees or get paid in crypto (president Nayib Bukele has stated this himself), and businesses that pay in Bitcoin will be sanctioned. This was one of the major concerns of the population, as the price volatility of Bitcoin could damage many families’ financial situation. Many live on a tight budget and can’t wait for Bitcoin to rise if it’s low.

The Bitcoin law allows businesses to pay employees in Bitcoin. The Work Law of El Salvador, Article 120 says that “the salary must be paid in legal tender.” The Bitcoin Law reads: “This law has the purpose of regulating Bitcoin as legal tender, with no restrictions for payment, no limits for any transaction and for any title people or corporations were to use.”

“If salary must be paid in legal tender, which both USD and Bitcoin are, why would paying salaries in Bitcoin be illegal? This creates confusion. These are the most likely reasons why a protest should start. The government needs to step in to fill the gaps and explain the Bitcoin law, since it’s self-contradictory and doesn’t give direction on many daily decisions,”
Diego added more.

What’s the Future?

As Diego observed, most citizens don’t know much about crypto, and they are indifferent to or feel scared of the new currency. However, due to Bukele’s popularity, people might give Bitcoin a try. It’s also important to state that Salvadorans are very distrustful towards the concept of easy money; the idea of your money growing over time without doing a thing sounds unreal to many people.

Besides that, since there’s no real advantage of using Bitcoin instead of USD on a daily basis, it might take a while for people to fully adopt Bitcoin as a currency. Government is encouraging people to use Chivo wallets by giving discounts on gas, but there’s still a long way to go.

Yet the young Salvadoran is positive about the country’s future with Bitcoin:

“Cryptocurrency will help in the long term; the possibility of not relying on banks for transactions or saving money is great. If El Salvador is a small country, with an economy that’s small, it might be possible for financial institutions to offer more affordable services or lower fees. The decentralized cryptocurrency Bitcoin may give local entrepreneurs the ability to scale their businesses without any hassle.

Still, everything will depend on the level of knowledge/education people have about crypto and finances, but it’s interesting at what level we can grow as a country in the future.”

To The Flipside

• To fully comprehend and utilize Bitcoin everyday, people need to be educated on blockchain and cryptocurrency.
• Although El Salvador’s future with Bitcoin remains uncertain, improvements could help to grow the economy.

Why you should care

Other countries might eventually follow El Salvador’s lead and adopt crypto as a legal tender.

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