El Salvador's Bitcoin Wallet Chivo Enables 52 Million USD in Remittances

El Salvador's Bitcoin Wallet Chivo Enables 52 Million USD in Remittances

El Salvador, payment app Chivo has enabled 52 million USD in remittances during the past 6 months, as expatriates make use of commission-free BTC transfers.

Salvadorans living abroad have sent over 50 million USD in remittances from January to May this year, according to the El Salvador Central Reserve Bank.

Douglas Rodrguez, President of the El Salvador Central Bank, disclosed the general economic outlook for the country on the local television news programme on Wednesday.

A major takeaway was the 52 million USD of remittances processed by the national digital wallet service Chivo during the first five months of the year. This marks a 3.9% and 118 million USD increase in value when compared to the same period in 2021.

Chivo was launched in September 2021 as the Central American country became the first in the world to adopt Bitcoin (BTC) as legal tender. The launch of the app reportedly attracted more than 2 million users in less than a month, leading to operational issues for the state-endorsed payment platform.

The government-sanctioned payment service provider was relaunched in February this year, necessitated by the onboarding of an estimated 4 million users looking to make use of low fees for payments and transfers made in BTC. American cryptocurrency exchange, software firm AlphaPoint addressed the scaling and stability issues.

Chivo offers users commission-free transfers and payments in BTC and U.S. Dollars. El Salvador’s President and Bitcoin advocate, Nayib Bukele, has previously claimed the app will save citizens some 400 million USD in annual commissions spent using conventional remittance and payment service providers in the country.

The application also makes use of the bitcoin layer-2 payment protocol Lightning Network, which provides low-fee BTC transactions. The adoption of Bitcoin and Chivo in El Salvador has had a measurable effect on the uptick in Lightning Network transaction volumes, with a 400% increase in payment volume over the past year.