El Salvador becomes first bitcoin nation
September 8, 2021 - El Salvador’s pioneering adoption of bitcoin as legal tender hit snags within hours of launching, after the government’s “Chivo” digital wallet app crashed, triggering a global price slump.
In June, lawmakers approved the bill to introduce the cryptocurrency -- the brainchild of El Salvador’s President Nayib Bukele -- and the virtual coin rolled out on Tuesday.
Under the law, all businesses in El Salvador have to accept bitcoin as payment for goods and services, though citizens can still choose to use the U.S. dollar, which has been the national currency since 2001. Salvadorians can also use the coin for tax payments.
President Bukele said on Twitter early yesterday that the Chivo wallet app, which stores digital assets, would go offline while he sorted out technical glitches.
He said his team was working to increase server capacity to scan images. “It’s a relatively simple problem, but you can’t fix it with the system connected,” he told his Twitter followers. “A little bit of patience.”
The bitcoin price fell as much as 17 per cent to $43,119 before recovering to trade at $44,740 on Wednesday morning.
Despite Bukele’s popularity, the move has been greeted with scepticism by many Salvadorans concerned about the cryptocurrency’s volatility. Bukele took to Twitter to urge citizens to “buy the dip,” saying he had purchased another 150 coins to take the nation’s total holding to 550, worth about $26 million.