The current state of Bitcoin in El Salvador.
Bitcoin is legal tender in El Salvador for at least one year now, but people only downloaded the Chivo application to get their free $30 AirDrop that the government-sponsored after that few and fewer people are using the app. The government at this point is having huge unrealized capital losses, and it is also leaking money to maintain the application available to users.
Tourism has improved in the country but it is not just because of Bitcoin, it is because the government has done a real crackdown on criminal activity by gang members. The crackdown has given results with over 50 thousand gang members in jail and waiting for a sentence at the expense of civil liberties and rights. I have connections to my birthplace in the form of family and friends, and they are giving me some information that at this point is just speculation at best and exaggeration at worst.
Family and friends tell me they feel as like if they went back in time to the times just before the bloody civil war when someone could accuse you of being a gorilla fighter and your whole family could be killed by the national army. They feel the same situation is happening again, where people can accuse you of being a gang member and you could be taken away by the police without the right to defend yourself with a lawyer. You can disappear once you are under the police because you have no rights at this moment as a Salvadorian. My family tells me there are rumors of police firing at gang members that try to flee even if they don't hold any weapons, and if you flee from police they will open fire at you even if you are unarmed, and they will accuse you of being a gang member undercover. The news will not report on this because reporters at this point can be called gang associates by just going against the government narrative. People are feeling how little by little they are losing their liberties and how the media is going silent. Of course, the government will reject those allegations but time will tell what human rights were violated after years and years have passed, almost as has happened with a lot of similar cases.
As a citizen, you can be accused of being a gang member by someone directly or by your way of expressing yourself because those that support the government will say that the only ones complaining are gang members themselves and as such you must be one of them too. If you live inside El Salvador your liberty is at risk if you speak your mind not to mention people don't understand that dictators never take full power at once but little by little.
If as a born citizen you have no rights at the moment, what rights those that are naturalized should expect? The president want to enable rich people to invest in the country at first was 3 Bitcoin but now is 100 thousand dollars to be considered for residency and a fast way to citizenship, but would you invest your money in a country where citizens have no rights and can get pick up by police without the right of legal representation?
The Chivo application is not being adopted because people prefer dollar bills over Bitcoin, not to mention people can't afford the volatility that Bitcoin offers. After all, a great number of citizens are not educated enough to understand such concepts nor have the will to learn. The government is spending money to run the application that fewer and fewer Salvadorians use and tourists prefer to wait and see what will happen before investing in the country.
For those that live outside the country, the Chivo application is just another way to get Bitcoin because nations like the United States already have access to exchanges and better applications to exchange fiat currency for Bitcoin.
I guess we will only see benefits once Bitcoin goes up in price again and investors get hyped again to invest inside the country without asking that many questions, until that moment only those educated and with enough disposable income will continue to use Chivo to obtain Bitcoin.
In short, people feel that volatility is a problem for them and would rather get dollar bills, and investment from abroad could stop if the government can't put criminal activity under control without sacrificing citizens' rights. If the government cracks down too much where regular citizens are affected it could start massive protests, negating any advantages. And investors don't like turmoil when it comes to parking money. Regular people are not using Bitcoin only those with financial room in their wallets.