El Salvador’s national Bitcoin system crashes after country declared legal acceptance of crypto

The Chivo Wallet system crashed on Tuesday when a recently passed law recognising Bitcoin as legal tender in El Salvador took effect.

The Chivo Wallet’s website was taken down on Tuesday, according to Sky News when a recently passed law recognising Bitcoin as legal tender in El Salvador took effect.

Citizens have protested against it, complaining that there has been too little explanation from officials about what benefit Bitcoin will bring and how transactions using the cryptocurrency will work.

Claudia Molina, a 42-year-old who sells T-shirts and souvenirs, criticised the plan.

“We don’t know the currency. We don’t know where it comes from. We don’t know if it’s going to bring us profit or loss. We don’t know anything,” she told Reuters.

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“They haven’t given us training. They haven’t told us what we’re going to use or how to make the change,” she added.

He said that server capacity was being increased – a “relatively straightforward problem to fix”, but one that needs the system to be disconnected.

“Mejor despacio y con buena letra,” he tweeted, an idiom that translates as “slowly and with good handwriting” – meaning that it’s better not to rush.

“Un poquito de paciencia,” he added, meaning “a little bit of patience”.

Even the Chivo Wallet’s website was taken down on Tuesday when a recently passed law recognising Bitcoin as legal tender in El Salvador took effect.

Citizens have protested against it, complaining that there has been too little explanation from officials about what benefit Bitcoin will bring and how transactions using the cryptocurrency will work.

Claudia Molina, a 42-year-old who sells T-shirts and souvenirs, criticised the plan.

“We don’t know the currency. We don’t know where it comes from. We don’t know if it’s going to bring us profit or loss. We don’t know anything,” she told Reuters.

“They haven’t given us training. They haven’t told us what we’re going to use or how to make the change,” she added.

Carlos Carcah, a professor at El Salvador’s Superior School of Economics and Business, argued that adoption of Bitcoin as legal tender “is not necessary, nor convenient”.

 

He added: “As long as there is someone who accepts payment with Bitcoin, the same as they accept dollars, there wouldn’t be problems.”

He noted that Bitcoin is extremely volatile, so investors “run the risk of becoming rich and the next day being poor”.

El Salvador’s own currency, the Salvadoran colon, was replaced by the US dollar in 2001.

The country depends heavily on money which citizens based abroad, often in the US, send home and these remittances to El Salvador were worth almost $6bn in 2019, amounting to 16% of El Salvador’s gross domestic product.

The country moved to using the US dollar as legal tender as a result of these remittances, and the move to Bitcoin is based on an expectation that more Salvadorans will begin sending money home using the cryptocurrency – and the Chivo Wallet is intended to be available to citizens who are residing abroad.

(Sky)

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