The El Salvador Central Reserve Bank reports that from January to May of this year, payment app Chivo has processed remittances from Salvadorans residing abroad totaling about $50 million.
The $52 million in remittances that Chivo, a national digital wallet service, processed over the first five months of the year, was a significant finding. When compared to the same period in 2021, the value has increased by $118 million, or 3.9 percent.
On Wednesday’s episode of the regional television news program Frente a Frente, Douglas Rodrguez—president of El Salvador’s central bank—explained the broad economic picture for the nation.
In September 2021, Chivo was introduced as the Central American nation became the first in the world to recognize Bitcoin (BTC) as legal money. More than 2 million users are said to have downloaded the app in less than a month of its release, which caused significant teething troubles for the state-approved payment network.
The relaunch of the government-approved payment service provider in February of this year was made necessary by the onboarding of an estimated 4 million customers who wanted to take advantage of the reduced rates for BTC payments and transfers. AlphaPoint, an American software company, joined the project to address scaling and stability difficulties.
Users of Chivo can send and receive money commission-free in both Bitcoin and US dollars. Nayib Bukele, the president of El Salvador and a supporter of Bitcoin, has previously asserted that the app will save users $400 million a year in fees from utilizing traditional remittance and payment service providers in the nation.
The Lightning Network, a Bitcoin layer-2 payment mechanism that offers low-cost BTC transactions, is also used by the application. With a 400 percent rise in payment volume over the previous year, the uptick in Lightning Network transaction volumes may be directly attributed to the adoption of Bitcoin and Chivo in El Salvador.
