Are cryptocurrencies currencies? Bitcoin as legal tender in El Salvador

A currency's essential feature is to be a medium of exchange. We leverage a quasi-natural experiment––El Salvador as the first country to make Bitcoin legal tender––to study a cryptocurrency's potential to be used in daily transactions. The government also launched and provided incentives to download and use a digital wallet named Chivo, which shares features with Central Bank Digital Currencies (CBDCs) and allows users to trade bitcoins and dollars. Were Chivo Wallet and Bitcoin actually adopted after this \"big push\"? Conducting a representative face-to-face survey and relying on blockchain data to obtain all Chivo transactions, we document how usage of digital payments and Bitcoin is low, concentrated, and has been decreasing over time. We find that privacy concerns are key barriers to adoption, which speaks to a policy debate on crypto and CBDCs that has had anonymity at its core. We also estimate the technology's adoption cost and its network externalities.,

We provide the data from the survey implemented in El Salvador by Cid Gallup, and the codes required for the analysis of these data. The blockchain data, which is used in the last section of the paper, was obtained from Crystal Blockchain B.V (crystalblockchain.com), and we share the Stata code and data required to generate all the figures in the paper.

, Only Stata is required to run all programs. ,  
Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador
(README)
 
This README file was generated on 2023-08-01 by Fernando Alvarez, David Argente, and Diana Van Patten

University of Chicago
Yale University
Yale University

GENERAL INFORMATION

1. Title of Dataset: Are Cryptocurrencies Currencies? Bitcoin as Legal Tender in El Salvador

We conduct a nationally representative face-to-face survey spanning 1,800 households during February 2022. Respondents are all adults, which is a prerequisite to be eligible to use Chivo Wallet. The national survey was conducted in partnership with CID-Gallup. This replication package contains data, Stata codes, and output files all figures and tables in the paper. We provide the data from the survey implemented in El Salvador by Cid Gallup, and the codes required for the analysis of these data. The blockchain data, which is used in the last section of the paper, was obtained from Crystal Blockchain B.V (crystalblockchain.com), and ...