SAN SALVADOR— El Salvador on Tuesday became the
first country to adopt bitcoin as legal tender, although it suffered teething
problems when the government had to unplug a digital wallet to cope with
demand.
اضافة اعلان
President Nayib Bukele, who pushed for adoption of the cryptocurrency, called for help from users who had already downloaded
the government-backed app, to test if it was now working properly.
"Could you please try to register and post in the
comments if there are any errors or if the whole process works fine?" the
president wrote on Twitter.
Bukele said using bitcoin will help Salvadorans save $400
million a year on commissions for remittances, while giving access to financial
services to those with no bank account.
Doubters say the move may fuel money laundering and
financial instability. It has already muddied the outlook for more than $1 billion in financing that El Salvador is seeking from the
International Monetary Fund (IMF).
The 40-year-old president is Latin America's most popular
leader but has been accused of eroding democracy,
not least by the administration of US President Joe Biden.
Last week, top judges appointed by his lawmakers ruled that
he could serve a second
term.
Earlier on Tuesday, Salvadorans trying to download the Chivo
digital wallet, which the government has promoted, promising $30 of bitcoin for
each user, found it was unavailable on popular app stores. Then Bukele tweeted
that the government had temporarily unplugged it, in order to connect more
servers to deal with demand.
Bukele blamed Apple Inc., Google, and Huawei's app download
platforms for the delay.
"Release him!
@Apple @Google and
@Huawei," Bukele
wrote in one of his tweets, which was accompanied by a red-faced
"angry" emoji. The wallet was later available from Huawei.
Bitcoin beach
Polls indicate Salvadorans are wary of the volatility of the
cryptocurrency, which can shed hundreds of dollars in value in a day.
Ahead of the launch, El Salvador bought 400 bitcoins, Bukele
said, helping drive the price of the currency above $52,000 for the first time
since May. Hours later, however, it had weakened about 4 percent to $50,516.
The change means businesses should accept payment in bitcoin
alongside the US dollar, which has been El Salvador's official currency since
2001 and will remain legal tender.
Some citizens were optimistic.
"It's going to be beneficial. ... We have family in the
United States and they can send money at no cost, whereas banks charge,"
said Reina Isabel Aguilar, a store owner in El Zonte Beach, some 49km southwest
of the capital, San Salvador.
Known as Bitcoin Beach, El Zonte aims to become one of the
world's first bitcoin economies.
However, uptake across the rest of the country may slowed by
a lack of internet penetration.
It remains unclear whether businesses will be penalized if they do not accept
bitcoin.
In the run-up to the launch, the government installed ATMs
that allow bitcoin to be converted into dollars and withdrawn without
commission from the digital wallet, called Chivo.
"Like all innovations, El Salvador's bitcoin process
has a learning curve," Bukele tweeted. "Not everything will be
achieved in a day, or in a month."
Levers of power
In barely two years in office, Bukele has taken control of
almost all levers of power. But although he has promised to clean up graft, the
Biden administration recently put some of his close allies on a corruption
blacklist.
Analysts fear that the
adoption of bitcoin, whose
transaction records are distributed across the internet, beyond the reach of
national jurisdictions, could fuel money laundering.
After the bitcoin law was approved, the rating agency
Moody's downgraded El Salvador's creditworthiness, while its dollar-denominated
bonds have also come under pressure.
Bukele, who does not shy away from controversy, on Monday
retweeted a video that showed his face superimposed on actor Jaime Foxx's body
in a scene from Django Unchained, a Quentin Tarantino film about American
slavery. The video portrayed Bukele whipping a slave trader who had the IMF
emblem emblazoned on his face.
Bukele later deleted the retweet.
In his own tweet, Bukele said: "We must break the
paradigms of the past. El Salvador has the right to advance towards the first
world."
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