Early Stumble As El Salvador Launches Bitcoin As Currency

[ad_1]

SAN SALVADOR, El Salvador >> El Salvador became the first country to adopt Bitcoin as legal tender today, but the rollout stumbled in its early hours and President Nayib Bukele said the digital wallet used for transactions was not working not.

For part of the morning, the President of El Salvador became the tech support for a nation entering the cryptocurrency world. Bukele organized his Twitter account – with over 2.8 million subscribers – to explain to users what was going on.

Bukele explained that the Chivo digital wallet was disconnected while the server capacity was increased.

The chairman said it was a relatively simple problem. “We prefer to fix it before reconnecting it,” Bukele said. He encouraged subscribers to download the app and leave comments on how it went.

Meanwhile, Bitcoin’s value fell early today, from over $ 52,000 per coin to $ 42,000, before recovering about half of that loss – an example of the volatility that worries many.

The government has promised to install 200 Chivo ATMs and 50 Bitcoin Attention Centers.

The Associated Press visited one of the ATMs in the historic center of San Salvador, where attendants were waiting to help citizens, who initially did not show much interest.

When asked if he had downloaded the Chivo app, Emanuel Ceballos replied no. “I don’t know if I will do it, I still have doubts about the use of this currency.”

José Martín Tenorio said he was interested in Bitcoin, but had not downloaded the app either. “I run to work. Maybe home tonight.

In Santa Tecla, a suburb of San Salvador, young helpers waited to help people in a help center.

Denis Rivera arrived with a friend because they had tried to download the digital wallet app without success.

He said he didn’t understand why some people were “outraged” by Bitcoin. “We’ve been using debit and credit cards for years and it’s the same, electronic money,” he said.

He was in favor and planned to use the $ 30 offered by the government as an incentive to try it. “I’m going to see how efficient and convenient it is and based on that, decide whether to continue using it or not. “

José Luis Hernández, owner of a hairdressing salon in the neighborhood, came to seek information.

“I have a small business and I want to know how to use the app and what the rates are and all that,” Hernández said.

The AP has confirmed that at least three international fast food chains accept Bitcoin payments through the Chivo digital wallet.

David Gerard, author of “Attack of the 50 Foot Blockchain,” said Bitcoin’s current volatility probably had nothing to do with El Salvador. “My first guess was shenanigans, because it’s always shenanigans,” Gerard said via email.

“Bitcoin is fundamentally not responding to market forces or regulatory announcements,” Gerard said. “This kind of pricing model, where it crumbles wildly in a matter of minutes and then comes back up again, is usually one of the big guys that burns margin traders.”

Because Bitcoin is traded so lightly, it could also be a big holder making a big sale for money, sending the market for a spin, Gerard said.

Three recent face-to-face opinion polls showed that most Salvadorans did not agree with the government’s decision to make Bitcoin legal tender. Bitcoin joins the US dollar as the official currency of El Salvador.

In June, the Legislative Assembly enacted the Bitcoin Law and the Central American Bank for Economic Integration is providing technical assistance to the government.

The law says that Bitcoin can be used for any transaction and any business with the technological ability to do so must accept payment in cryptocurrency.

The government will support Bitcoin with a fund of $ 150 million. To encourage Salvadorians to use it, the government has offered a $ 30 credit to those who use Chivo.

Critics have warned that the currency’s lack of transparency could attract increased criminal activity to the country, and its sharp fluctuations in value could quickly wipe out users’ economies.

Opposition groups marched in El Salvador to demand the waiver of the law that allows the use of Bitcoin.

Bukele said the cryptocurrency – originally created to operate outside of government-controlled financial systems – would help attract investment and save Salvadorans money when they transfer their income to states -United with relatives in El Salvador. But its use would be voluntary.

[ad_2]