El Salvador’s first day with bitcoin as legal tender on Tuesday (Sept. 7) got off to a bit of a rocky start, with the government forced to unplug a digital wallet that was overwhelmed by the demand, according to a Reuters report.
President Nayib Bukele asked Twitter users who downloaded the government-supported app if it was working in a tweet early in the day. He has said that using bitcoin will save about $400 million a year on commissions, while also giving unbanked Salvadorans access to financial services.
Government leaders temporarily shut down the Chivo digital wallet, which it has promoted with the promise of $30 in bitcoin for each user, to help more users connect as demand far exceeded first-day expectations. Bukele blamed Apple, Google and Huawei’s app download platforms for the issues.
“Release him! @Apple @Google and @Huawei,” Bukele wrote in one of his tweets, which was accompanied by a red-faced “angry” emoji before Huawei made the app available.
Almost half of El Salvador’s population has no internet, and the half who do often struggle to stay connected because of spotty network access. Others fear that the use of bitcoin as legal tender will lead to money laundering and financial instability across the country because of its volatility.
The change means that businesses should accept payment in bitcoin alongside the U.S. dollar, which has been El Salvador’s official currency since 2001 and will remain legal tender.
Ahead of today’s launch, the government had ATMs installed across the country that allow bitcoin to be converted into dollars and withdrawn from the digital wallet, called Chivo, without commission fees.
“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 … We must break the paradigms of the past. El Salvador has the right to advance toward the first world.”
El Salvador bought $21 million of bitcoin, arguably the most visible name in cryptocurrency, ahead of today’s launch, and Bukele tweeted that El Salvador will seek to buy “a lot more.”
El Salvador’s GDP is about $27 billion, per World Bank data.