In El Salvador, the use of Bitcoin for daily shopping has reportedly decreased significantly. An experience shared by Jon Atack, a Bitcoin Core developer living in the country, highlights the decline in the cryptocurrency’s use as a means of payment.
Atack wanted to pay for his meal with Bitcoin at a restaurant in El Zonte, also known as “Bitcoin Beach,” which has become a symbol of Bitcoin use. Restaurant employees said that Atack’s payment was the only Bitcoin transaction the business had made all month. They also noted that card payments were significantly more common than Bitcoin for everyday purchases.
Experts attribute the decline in Bitcoin’s commercial use in the country to several factors. Chief among these is the “HODL” approach, which is becoming increasingly popular among investors. In this strategy, Bitcoin is viewed as a long-term store of value rather than a payment method for daily expenses. The high volatility in Bitcoin’s price also contributes to consumers and businesses being reluctant to use cryptocurrency for payments.
El Salvador became the first country in the world to recognize Bitcoin as an official currency in 2021. However, following a loan agreement with the International Monetary Fund (IMF), some regulations regarding Bitcoin acceptance were changed.
Under the new regulations, accepting Bitcoin payments has become voluntary for businesses, rather than mandatory. This change has raised concerns that it will further reduce the use of Bitcoin in daily commerce in the country.
Although the El Salvadoran government continues to support Bitcoin use and the digital asset ecosystem, recent data shows a significant gap between cryptocurrency adoption as an investment vehicle and its use as a daily payment method. Analysts state that for Bitcoin to become a widespread payment method, price stability and increased spending habits among users are necessary.
*This is not investment advice.
Continue Reading: Bitcoin Payments in El Salvador Have Nearly Come to a Standstill! Here’s Why