El Salvador’s Bitcoin remittance boom is over: only 1.1% usage in 2024

Source: Aiying Payment Compliance

Despite the Salvadoran government's strong push for cryptocurrencies, especially Bitcoin, under President Nayib Bukele's leadership, adoption in the remittance space has not increased as much as expected. According to the latest data from the Central Reserve Bank of El Salvador, only 1.1% of remittances between January and August 2024 involved cryptocurrencies, a far lower percentage than the government had intended.

Remittance adoption remains low

Although El Salvador has established Bitcoin as legal tender since 2021 and positioned itself as one of the world's leading cryptocurrency countries, its real-life application remains limited. Remittances, one of the use cases that the Bukele government particularly values, should have attracted the public with their low cost and ease of operation. However, despite the government's promotion, many Salvadorans are still on the sidelines about digital currencies such as Bitcoin.

According to the Central Reserve Bank's Household Remittances Report, the vast majority of Salvadorans still choose to use the US dollar when making cross-border remittances. The data shows that in the first eight months of 2024, only 1.1% of remittances involved cryptocurrencies, indicating that traditional remittance methods still dominate.

This proportion corresponds to an amount of US$57.4 million, far less than the total remittance volume of US$5.46 billion. At the same time, traditional remittance companies still firmly hold the market share, responsible for 58.3% of transactions, and banks process 37.9% of remittances. The average amount of each cryptocurrency remittance is US$260.

Crypto remittances continue to decline

The report also reveals a more obvious trend: the use of cryptocurrencies in remittances has been declining since 2022. In 2022, Salvadorans received US$84.8 million in remittances via cryptocurrencies; by 2023, this figure fell to US$59.5 million, and in 2024 it further decreased to US$57.4 million, showing the continued shrinkage of cryptocurrency remittances.

The gap between government promotion and reality

In order to promote the use of cryptocurrencies, the Salvadoran government has spared no effort and even funded the national crypto wallet Chivo, and distributed Bitcoin to the public in the hope that they would adapt to this new currency more quickly. However, despite all the efforts, the public's adoption of cryptocurrencies is still low.

Even so, President Bukele did not ignore this reality. He admitted that the application of cryptocurrencies in daily payments and remittances was not as widespread as expected, but at the same time he also emphasized the benefits of Bitcoin as a legal currency to the country in other aspects, such as increasing international attention and attracting external investment. El Salvador's cryptocurrency road seems to have a long way to go.