El Salvador officially adopts bitcoin as legal tender, being the first country ever to do so. This means businesses must now accept bitcoin as a form of payment.
However, accessibility issues arose as the government had to unplug a digital wallet to cope with the demand.
SAN SALVADOR — Bitcoin will supposedly help Salvadorans save $400 million a year on commission for remittances, says President Nayib Bukele. This will also give access to financial services to people with no bank account.
However, the poorest may struggle to access the technology needed to make bitcoin work in El Salvador, where nearly half the population has no internet and many more only have sporadic access.
Others say the move may fuel money laundering and financial instability. It has already muddied the outlook for more than $1 billion in financing that El Salvador is seeking from the International Monetary Fund (IMF).
Salvadorans tried to download the Chivo digital wallet, which the government promised $30 of bitcoin for each user upon installment, but found that it was not available on app stores.
Bukele then said that the government temporarily unplugged it to connect more servers to deal with demand.
In the run-up to the launch, the government installed ATMs that allow bitcoin to be converted into dollars and withdrawn without commission from the digital wallet, called Chivo.
“Like all innovations, El Salvador’s bitcoin process has a learning curve,” Bukele posted on social media. “Not everything will be achieved in a day, or in a month.” (HMP/The MiNT)