Key Takeaways:
- Bitcoin was officially introduced as legal tender in El Salvador; government hold 550 bitcoins
- The volatile cryptocurrency will be used for payments of any kind, along with the US dollar
El Salvador Moves to Embrace Bitcoin as Legal Tender
El Salvador marked the world’s first adoption of bitcoin as a legal tender on September 7. The small Latin American nation is now able to use bitcoin for pizza, taxes, land, or even a haircut.
President Nayib Bukele has put significant efforts into making his country the first one to grant the original cryptocurrency the status of legal tender and national currency.
The launch, however, got off to a bumpy start as the Salvadoran government had to disconnect the cryptocurrency wallet in order to deal with technical glitches. The bitcoin e-wallet, called Chivo, is pre-loaded with a $30 credit in bitcoin available to users who log into the platform with their national ID number.
The Chivo Wallet Runs into Technical Glitches
The state-run Chivo, slang for “cool”, should appear on leading app stores, including Apple’s App Store, and Google’s Play Store. Some users reported various issues when signing up or trying to pay with their distributed credit. Some even reported the Chivo app was not showing in app stores. Issues had to be dealt with mostly in real-time.
To introduce bitcoin as smoothly as possible and to meet the demand, the government of El Salvador will roll out about 200 bitcoin ATMs around the country. Besides using bitcoin for local payments, citizens would rely on the volatile cryptocurrency to get remittances from people living abroad.
The El Salvadoran government now holds 550 bitcoins, according to a tweet by Mr. Bukele.
Meanwhile, bitcoin proponents largely cheered the achievement of the small and economically weak country. Bitcoin’s adoption by an entire country, albeit relatively tiny, will be closely observed by crypto circles, government institutions, banks, and even corporations.
However, on the first day of bitcoin being the national currency of El Salvador, the value of the original coin tumbled as much as 17% to levels near $42,900. Bitcoin’s price later pared back some of the losses.
The 6.5 million Central American nation would still be able to use the US dollar as a means of payment, along with bitcoin.