Sept 8,2021: San Salvador, El Salvador – Bitcoin is now officially legal tender in El Salvador, but the country’s landmark adoption of the world’s largest cryptocurrency got off to a less than auspicious start on Tuesday.
Before the law officially took effect at 3pm local time (21:00 GMT), the country’s new digital wallet – called Chivo – suffered glitches, forcing the government to take it offline while it boosted server capacity.
“We have disconnected it while increasing capacity of the image capture servers,” tweeted President Nayib Bukele. “The installation problems that some people had were for that reason.”
As the government grappled with technical problems, a small but growing group of people opposed to the new Bitcoin law turned out to protest it in the capital San Salvador.
President Bukele stunned the crypto and wider world in June when he announced that his nation would adopt Bitcoin as legal tender alongside the United States dollar, which has been the currency in the tiny, indebted central American nation since 2001.
With just 90 days to prepare for the historic adoption, teething problems surfaced early on Tuesday when the much-anticipated Chivo digital wallet disappeared from app stores.
Chivo will allow people to use either Bitcoin or US dollars and transfer between the two without fees. The newly installed Chivo ATMs around the city were also not working, and there was confusion about when the app would be available again or when ATMs would be functional.
President Bukele has pitched El Salvador as a destination for both Bitcoin companies as well as individuals, promoting no capital gains taxes on investments in the cryptocurrency, no property tax and even offering residency to any foreigner who spends three Bitcoin in the country.
Despite the president’s boosting efforts, there is even uncertainty about how the law will function among the country’s small but growing expat community of Bitcoin supporters.
However, some Salvadors aren’t waiting for official clarity and are already using Bitcoin.
Bukele remains wildly popular even though his Bitcoin law may not be.
According to an August poll by Central American University, 65 percent of the population opposes the law. Yet the same survey also gives President Bukele an approval rating of 76 percent.
Also this week, the nation’s top court ruled that a president can serve two consecutive terms, making Bukele eligible to rule the country until 2029. The judges behind the decision include ones appointed by the president’s party in May after existing justices were dismissed.
