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El Salvador bears challenging week with BTC as legal tender

El Salvador made history as it officially began accepting crypto as a national currency last Tuesday, September 7. However, the first few days of its effectiveness was met with several problems. These included long lines at the cash machines, malfunctioning apps, and several local businesses that still do not accept Bitcoin. 

Dubbed as ‘Bitcoin day’, September 7 marked an important moment in the world of cryptocurrencies. El Salvador has been working on the regulation and eventual adoption of crypto since 2020 and President Nayib Bukele hopes that it will improve the country’s economic problems. 

Instead of paying high transaction fees to send money or purchase items, there will be no need for banks of any physical currencies. The government hopes that the use of Bitcoin will make transactions easier for the people and struggling businesses in the country. 

To officially hold their own Bitcoin as a national currency, the locals must download the government’s digital wallet named Chivo. This is named after the local slang that translates to ‘cool’. Once the download is successful and they have verified their identity, they can get their $30 worth of free Bitcoin. 

The El Salvadoran government allotted a $150 million budget to make the conversions from USD to Bitcoin possible. Finance Minister Alejandro Zelaya said that he expects 2.5 million people to download the Chivo wallet and begin using Bitcoin. 

The first day of the major change was met with mixed results. While some people were excited about the fact that they could use Bitcoin as a mode of payment, others were protesting against it. People complain about Bitcoin ATMs not working and certain apps that still wouldn’t accept crypto. 

The prices of Bitcoin also dipped from over $52,000 to $46,892.04 on the same day. This is a steep 16% drop that was caused by the Bitcoin adoption in the country. 

A little after midnight on September 7, President Nayib Bukele started complaining that certain apps like Huawei and Apple were not successfully launching the wallet. This made it difficult for people to transition from using US dollars to Bitcoin. 

Later on, Bukele went on to Twitter to praise businesses like Mcdonald’s and Starbucks that were able to integrate Bitcoin in their payments system immediately. He went on to press other online stores in the country to do the same. 

However, experts believe that these technical difficulties could just be the start of their problems. According to Charles Riley of CNN Philippines, ‘Bukele may succeed in ironing out the initial technical glitches, but the biggest risk from Bitcoin will persist long into the future.’ 

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