El Salvador’s ambitious move to adopt Bitcoin as legal tender has faced increased criticism as a new report suggests the country has spent approximately $329 million on the project with very limited success.
Released by human rights watchdog Cristosal, the report details the costs associated with the country’s Bitcoin adoption, including infrastructure setup and related incentives. This comes at a time when the global inflation rates are spiking and concerns are mounting over the lack of transparency and effectiveness of El Salvador’s crypto experiment.
A human rights group highlights financial details
The report is based on limited publicly available information, primarily from President Nayib Bukele’s Twitter account, legislative records, and U.S. judicial proceedings. It itemizes the $329 million expenditure, with $150 million allocated to the Bitcoin Trust (Fidebitcoin), $30 million for welcome bonuses in the Chivo Wallet, $23.3 million for a crypto-friendly project, and $121 million for purchasing Bitcoin. Another $4.7 million was spent on contracting Athena for 200 Chivo ATMs.
Cristosal criticized the government for the lack of fiscal oversight, questioning the source of the funds and the legality of such financial operations conducted without public supervision or transparency.
Salvadorans are slow to adopt Bitcoin
Despite President Nayib Bukele’s initial enthusiasm for the project as a means to boost the country’s economy and streamline remittances, the public has been less than eager to embrace cryptocurrency.
Recent data revealed that only 1% of remittances between January and July this year were processed through the government’s Chivo digital wallet. A May poll by the Central American University indicated that 71% of Salvadorans do not believe that Bitcoin has improved their family’s financial situation.
Bitcoin’s value has dropped from about $45,000 to just over $25,500 over the last two years, adding to public skepticism.
El Salvador’s crypto initiative was a high-stakes gamble that has yet to pay off, receiving both international skepticism and domestic scrutiny.