An exchange that brings its stone to the building – The king of cryptocurrencies is settling in the monetary landscape of El Salvador. Its debut marked by the purchase of the first bitcoins (BTC) by the country. Also of note is the launch of the Chivo wallet, now backed by the Bitso exchange and other major players in finance (traditional and new), and even indirectly…by the US FED.
The Chivo Bitcoin wallet and its difficult first steps
On September 7, South American exchange Bitso, founded in 2014, announced that it would support the launch of El Salvador’s new official Bitcoin wallet, Chivo. The exchange will collaborate with Silvergate Bank, Athena Bitcoin and Algorand.
- Bitso will be Chivo’s primary cryptocurrency service provider.
- Silvergate Bank will facilitate US dollar transactions for Chivo. Silvergate Bank is a commercial bank licensed by the State of California and a member of the US Federal Reserve (Fed).
- Athena Bitcoin will provide certain front-end services and provide ATM-related operations for Chivo.
- Algorand will be the official blockchain provider.
The Chivo wallet has been available for download since September 7, 2021. Chivo allows individuals and businesses to transact in BTC and has functionality to convert BTC received into US dollars.
Note that none of the withdrawals, deposits or other transactions made with Chivo would generate any fees for users.
However, the first days of Chivo have been plagued with problems. After the wallet’s launch, El Salvador’s president, Nayib Bukele, reported temporary capacity issues on the platform. These errors caused problems installing applications. Bukele explained that Chivo would temporarily disconnect its systems to resolve the concern.
A bitcoin that doesn’t delight everyone
El Salvador bought its first 200 bitcoins the day Satoshi Nakamoto’s creation became a legal tender in the country. While this is a historic event for the cryptosphere, Bitcoin is not universally appreciated by Salvadorans.
Some Salvadorans have in fact opposed this legalization of Bitcoin citing its volatility and security concerns. According to a survey by the Institute of Public Opinion of the Central American University of El Salvador, 70 % of Salvadorans believe that this law should be repealed. The results of the study also reveal that more than 90% of respondents reported having a poor understanding of cryptocurrencies.
Chivo’s launch day will have been marked by minor bugs and a Bitcoin flash spit. However, the event remains historic, and these problems will not have dampened the enthusiasm of the Salvadoran president who took advantage of the price drop to stock up on Bitcoins.
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