Digital Assets: Bitcoin Makes Bumpy Debut As Legal Tender In El Salvador
Bitcoin’s baptism as a country’s adopted currency was marred by glitches.
September 7 marked El Salvador’s date with destiny when the country’s citizens got to legally and freely use bitcoin as a currency alongside the US dollar. The rollout, a pet project of President Nayib Bukele, was marred, however, by technical problems and a citizens’ protest in San Salvador. Not helping was hefty volatility in the price of bitcoin the same day. (Reuters)
Chivo app crashes
President Bukele found to his ire that the government bitcoin wallet and app Chivo was not available on many internet app stores such as Apple and Huawei. His protests on Twitter had the desired effect and soon Huawei made the app available on its platform.
Bukele’s joy may have been shortlived however – the government servers could not cope with the rush of user registrations, and had to be taken offline to augment their capacity.
Angry protests in El Salvador
In San Salvador, opposite the Supreme Court, more than 1,000 irate citizens protested against the introduction of bitcoin by burning a tire and exploding fireworks.
Salvadoreans have previously expressed reservations about receiving crucial payments such as pensions and salaries in bitcoin, which is known for its high volatility.
El Salvador purchased $20 million worth of bitcoin in advance of its launch in the country as a means of smoothening the conversion process between the dollar and bitcoin, and also to fund the $30 promised to every citizen for downloading and activating the Chivo app.
According to Reuters, the transaction helped push the price of bitcoin over $52,000 for the first time since May.
As this is being written, bitcoin is trading at $46,259.42, down over 9% in 24 hours. It swung between a low of $42, 921.27 and a high of $51,066.09 in that period, its volatility on full display. (Prices: Coindesk)
Unfazed, President Bukele averaged down, announcing that El Salvador purchased an additional 150 bitcoins on Tuesday, worth around $7 million.
Despite the problems, Bukele put on a brave face, tweeting: “We must break the paradigms of the past. El Salvador has the right to advance towards the first world.”
Image Credit: Flickr
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