Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador-Reference-Cited by-同舟云学术

Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador

Published:2023-12-22 Issue:6677 Volume:382 Page:
ISSN:0036-8075
Container-title:Science
language:en
Short-container-title:Science

Author:

Alvarez Fernando¹^ORCID,Argente David²^ORCID,Van Patten Diana²^ORCID

Affiliation:

1. Kenneth C. Griffin Department of Economics, University of Chicago, Chicago, IL 60637, USA.

2. School of Management, Yale University, New Haven, CT 06511, USA.

Abstract

A currency’s essential feature is to be a medium of exchange. This study explores the potential of cryptocurrencies to be used in daily transactions in El Salvador, the first country to make bitcoin legal tender. The government’s “big push” introduced “Chivo Wallet,” a digital wallet sharing features with Central Bank Digital Currencies (CBDCs), with perks to use it for trading bitcoins and US dollars. Through a nationally representative, face-to-face survey of 1800 households and blockchain data encompassing all Chivo Wallet transactions, we document a pattern of low and decreasing usage of digital payments and bitcoin. Privacy and security concerns are key adoption barriers, which speaks to a policy debate on crypto and CBDCs with anonymity at its core. Additionally, we estimate Chivo Wallet’s adoption cost and complementarities among adopters.

Publisher

American Association for the Advancement of Science (AAAS)

Subject

Multidisciplinary

Link

https://www.science.org/doi/pdf/10.1126/science.add2844

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