Tuesday, February 27, 2024

El Salvador Becomes First Country to Adopt Bitcoin as Official Currency

El Salvador became the first country to accept Bitcoin as legal tender on Tuesday, although the government suffered from teething problems when it had to close its digital wallet to keep up with demand.

President Nayib Bukele, who has called for the introduction of cryptocurrencies, has asked users who have downloaded the government app for help to see if it now works properly.

“Could you try registering and posting in the comments if there is a bug or the whole process went well?” wrote the president on Twitter.

Bukela on Adoption Bitcoin

Bukele said using Bitcoin would help Salvadorans save $400 million a year in remittance commissions while providing access to financial services for those without a bank account.

Carlos Garcia, who went to a booth at the mall on Tuesday to discuss the new currency to learn how transactions would work, was excited about the possibilities Bitcoin could offer. “El Salvador took a big step forward today,” he said.

However, the poorest can struggle to gain access to the technology needed to make Bitcoin work in El Salvador, where nearly half the population has no internet and many more only sporadically.

“I will continue to suffer with or without bitcoins,” said pastry seller Jose Herrera, who said he had trouble accessing a cell phone.

Others say the move could trigger money laundering and financial instability. He has confused the more than $1 billion that El Salvador is seeking from the International Monetary Fund (IMF).

Bukele, 40, is Latin America’s most popular leader, but has been accused of undermining democracy, not least by the administration of US President Joe Biden.

Last week, a high-level judge appointed by his legislature ruled that he could run for a second term.

Tuesday morning, Salvadorans discovered that they were trying to download the Chivo digital wallet, where the government promised $30 bitcoin for each user, and it was not available on popular app stores. Bukele later tweeted that the government had temporarily shut down to connect more servers to conduct searches.

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