El Salvador has time and again been credited with ushering in a new wave of Bitcoin adoption. The Central American nation declared Bitcoin to be legal tender in 2021, mandating that all businesses accept the largest crypto asset. Parallelly, in economies where local currencies are suffering, like Argentina, Turkey, and Egypt, Bitcoin has been creating records. In a recent investor note, Ark Invest Research Associate David Puell pointed out that Bitcoin adoption in Argentina is outpacing that in El Salvador. Despite the legal tag, Salvador’s numbers depict mixed sentiment.
An OpEd by CoinDesk pointed out that there is interest in Bitcoin among bankers. However, they fear the repercussions with their international partners if they adopt the digital currency. In fact, several international bodies, like the IMF, expressed their disapproval in the recent past. For Bitcoin to succeed in the region, local banks need to be able to integrate the network into the existing services that they provide to their clients. However, their current set-up acts like a barrier. The report also pointed out that the complexity of using the Bitcoin network and self-custody additionally create barriers to mass adoption.
Bitcoin Awareness vs. Usage
In a recent podcast with Ark Invest, Angela Dalton, CEO at Signum Growth Capital, revealed her inference with respect to adoption in El Salvador. Unraveling what she noted during her recent trip to the Central American country, she pointed out that tourist destinations, like El Zonte’s Bitcoin Beach, exhibited widespread acceptance of BTC. However, that was not the case everywhere. She explained,
“Awareness is high, yet usage is still low… But there is a general sense of pride in the population that El Salvador is an early adopter of new technologies.”
Ark Invest’s Puell contended that citizens’ inclination towards the U.S. dollar and Bitcoin’s volatility were the main reasons behind this cautious approach.
In Argentina, on the other hand, the situation is a bit different, with evolution happening at a much faster pace. Amid the deteriorating state of the economy and sky-high inflation, Argentines are looking for alternatives to hedge their funds. Ark Invest’s analyst further pointed out that pro-Bitcoin presidential candidate Javier Mile’s victory in the recent summer primaries acted like a catalyst and pushed up BTC’s price by more than 20% to 10.2 million Argentine pesos within 24 hours. Puell said that if Milei wins the presidency in the general election that is slated for October, Bitcoin and the Argentinean citizen’s purchasing power will rise significantly.