FILE PHOTO: Workers wait for people interested in the use of Bitcoin, outside an ATM of Chivo wallet, a Bitcoin wallet that the Salvadoran government is launching for the use of Bitcoin as a legal tender, in San Salvador, El Salvador, September 7, 2021. REUTERS/Jose Cabezas
El Salvador’s President, Nayib Bukele, in a recent tweet announced that Chivo– the Bitcoin wallet backed by the government, now had 2.1 million active users. He tweeted: “2.1 million Salvadorans are ACTIVELY USING @chivowallet (not downloads). Chivo is not a bank, but in less than 3 weeks, it now has more users than any bank in El Salvador and is moving fast to have more users than ALL BANKS IN EL SALVADOR combined. This is wild!”
Following El Salvador’s adoption of Bitcoin as a legal tender, the Chivo wallet, backed by the government of El Salvador, was created to facilitate transactions in Dollars as well as Bitcoins from anywhere around the world. Impressively, the announcement from El Salvador’s President reveals that Chivo has managed to bank 32.56 percent of the El Salvadoran population in less than a month. The president also believes that within some more time, the increasing number of Chivo users may surpass the total number of bank customers in El Salvador. Additionally, the announcement indicates that the Bitcoin regime, as some analysts have described it, is being received favourably across the country, although there have been protests against the law before and after the official adoption as a legal tender.
With the adoption of Bitcoin as a legal tender, El Salvador set the record for being the first country to do so – a move that has since attracted praise and criticism from individuals, global regulators, and institutions alike.
As per reports, El Salvador’s decision to legalize Bitcoin trading was motivated by the idea of stirring the nation’s slowed-down economy amid the ongoing Coronavirus pandemic. Additionally, the decision of making Bitcoin a legal tender was aimed at reducing the country’s reliance on the United States Dollar. This decision has however been strongly criticized, a reason being that Bitcoin was too unstable and too risky to be used as mainstream tender. Questions have also been raised around Chivo wallet’s security provisions, given that the platform is not yet a full-fledged Bitcoin bank.
Despite criticisms from all over the world, El Salvador’s Bitcoin decisions have caused other countries to warm up to Bitcoin and cryptocurrencies. Ukraine is looking to make Bitcoin legal, in the country following El Salvador’s adoption.
However, countries such as China and Russia have taken a firm stance against Bitcoin and other cryptocurrencies. Recently, the Chinese government reiterated that transacting cryptocurrencies in the country is illegal, and vowed a continuous crackdown.
At the time of this writing, Bitcoin is trading at $43,798.
