Financial Task Force of Latin America Disregards Bitcoin Adoption Levels in El Salvador

The Financial Task Force of Latin America (GAFILAT), Latam's largest organization that fights money laundering and terrorism financing, has revealed

The Financial Task Force of Latin America (GAFILAT) released an evaluation of the state of El Salvador regarding compliance with international anti-money laundering requirements. The institution found that, while El Salvador included bitcoin as legal tender in 2021, the crypto asset has not reached a ‘significant impact’ or elevated transactional volumes.

Financial Task Force of Latin America Disregards Bitcoin Adoption Levels in Salvador

The Financial Task Force of Latin America (GAFILAT), Latam’s largest organization that fights against money laundering and terrorism financing, has revealed in its latest report evaluating El Salvador’s compliance that bitcoin has been only marginally adopted in the country’s economy.

The report, that examines the state of compliance of the country with 40 recommendations of the group, determined that even when El Salvador included bitcoin as legal tender in 2021, the adoption has not had a “significant impact” on the country’s economy nor high transactional volumes. GAFILAT found that during the evaluated period only $6.6 million had entered the financial system in the form of operations related to bitcoin, in exchange operations from BTC to U.S. dollars.

This volume represents less than 0.1% of all the assets administered by banks in El Salvador.

The remittance use case was also examined. GAFILAT reported that cryptocurrency has also failed to reach relevant numbers in this regard. On this subject, the report states:

Regarding the flow of remittances, these are channeled through traditional means, banking entities and other financial institutions, and less than 1% had been made through digital wallets.

The report affirms that there is a preference for using the U.S. dollar, given that the Salvadoran economy has been dollarized since 2000; however, the Salvadoran government has made significant efforts to popularize bitcoin, even launching its wallet, called Chivo, and offering $30 in BTC to users setting it up as an incentive.

Nayib Bukele, President of El Salvador and the key figure behind the bitcoin policies in the country, recently acknowledged that bitcoin had not developed as he wanted it to. Nonetheless, Bukele stressed that bitcoin allowed El Salvador to rebrand itself, bringing investments and tourism to the nation.

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