Salvadorans living abroad sent more than $50 million in remittances from January to May of this year, according to the Central Reserve Bank of El Salvador.
Douglas Rodríguez, president of the Central Bank of El Salvador, described the general economic perspectives of the country on Wednesday on the local news program Frente a Frente.
One of the most important aspects was the figure of USD 52 million in remittances processed by the national digital wallet service Chivo during the first five months of the year. This marks an increase of 3.9%, USD 118 million in value compared to the same period in 2021.
Chivo was launched in September 2021 when the Central American country became the first in the world to adopt Bitcoin (BTC) as legal tender. The app’s launch reportedly attracted more than 2 million users in less than a month, causing significant teething problems for the state-backed payment platform.
The government-sanctioned payment service provider was relaunched in February this year, due to the addition of some 4 million users who wanted to benefit from low fees for payments and transfers made in BTC. American cryptocurrency exchange software company AlphaPoint was brought on board to solve scalability and stability issues.
Chivo offers users fee-free transfers and payments in BTC and US dollars. El Salvador’s president and Bitcoin promoter Nayib Bukele has previously claimed that the app will save citizens some $400 million in annual fees that are spent using conventional payment and remittance service providers in the country.
The app also makes use of Bitcoin’s layer 2 payment protocol, the Lightning Network, which enables low-cost BTC transactions. The adoption of Bitcoin and Chivo in El Salvador has had a measurable effect on increasing Lightning Network transaction volume, with a 400% increase in payment volume over the past year.
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