Bitcoin

El Salvador&x27s world-first adoption of bitcoin endures bumpy first day | Reuters

san salvador, sept 7 (reuters) – the historic adoption of bitcoin as legal tender in el salvador on tuesday was plagued with teething problems, as an angry outcry from distrustful citizens, technological glitches and a drop in the cryptocurrency tarnished the launch.

The bold experiment got off to a rocky start when, shortly after midnight, Salvadoran President Nayib Bukele complained that the government-backed bitcoin app was not available on several internet platforms, including Apple and Huawei. .

Reading: When did el salvador adopt bitcoin

bukele used his twitter account to pressure online stores to store the app, or digital wallet, known as chivo, and huawei then started making it available. but when the app couldn’t cope with user registrations, the government took it offline to connect to more servers and increase capacity.

Still, as the app started appearing on more platforms, bukele was retweeting videos posted on social media by afternoon with people making bitcoin payments at retailers in el salvador, including mcdonald’s corp (mcd.n ) and starbucks corp (sbux.o).

“El Salvador is taking a big step forward today,” said Carlos Garcia, who went to a booth in a San Salvador shopping center to give advice on how the new currency would work.

the starbucks unit in el salvador said it was accepting bitcoins for purchases at its restaurants, self-service facilities or takeout.

Promising $30 of bitcoin for each user, bukele has pushed its adoption, saying it will help salvadorans save $400 million a year in remittance fees, while providing access to financial services to people without a bank account.

“We must break the paradigms of the past,” tweeted bukele. “the savior has the right to move towards the first world.”

Bukele, 40, is one of the most popular presidents in the Americas, but has been accused of eroding democracy. Opinion polls showed that Salvadorans are skeptical about using bitcoin, fearing its volatility and unsure how it will work.

More than 1,000 people staged a protest in San Salvador on Tuesday against the adoption of bitcoin, burning a tire and setting off fireworks in front of the supreme court.

See also: What Is Bitcoin? How Does It Work? – Forbes Advisor

As the currency’s price faltered, the government bought an additional 150 bitcoins on Tuesday, worth about $7 million.

Still, the poorest may struggle to access the technology needed to make bitcoin work in El Salvador, where almost half the population has no internet access and many more only have patchy connectivity.

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“I will continue to suffer with or without bitcoin,” said candy vendor José Herrera, who said he was having trouble accessing a mobile phone.

Some say that bitcoin adoption can fuel illicit transactions and financial instability. It has already clouded the picture of more than $1 billion in financing that El Salvador is seeking from the International Monetary Fund (IMF).

united states tensions

Before the launch, El Salvador bought 400 bitcoins worth about $20 million, Bukele said, helping push its price above $52,000 for the first time since May. Hours later, bitcoin had weakened, last trading down 0.51% at $46,561.74.

ethereum, another crypto currency, fell 0.32% to $3,404.05, while global cryptocurrency exchange coinbase (coin.o) fell 4.18% after reporting some transaction delays on its platform.

The change means businesses must accept bitcoin payments alongside the us. uu. dollar, which has been the official currency of El Salvador since 2001 and will continue to be legal tender.

It is unclear if businesses will be penalized if they do not accept bitcoin.

In the run-up to the launch, the government installed ATMs that allow bitcoins to be converted into dollars and withdrawn commission-free from the goat digital wallet.

bukele blamed apple inc (aapl.o), alphabet inc’s google and huawei app download platforms (googl.o) for the initial delay of chivo.

See also: If You Bought 10 Of Bitcoin In 2010, This Is How Much Money You&039d Have Now

“let him go! @apple @google and @huawei,” bukele wrote in a tweet, which was accompanied by an “angry” emoji with a red face.

the wallet was later available on huawei and apple.

A Huawei spokesperson said the company’s platform showed fewer than a thousand installations as of late Tuesday afternoon.

“Like all innovations, El Salvador’s bitcoin process has a learning curve,” Bukele said in a tweet. “Not everything will be achieved in a day, nor in a month.”

In just two years in office, Bukele has taken control of almost all the levers of power. but although he has promised to clean up corruption, the us. he recently put some of his close allies on a corruption blacklist.

Last week, the main judges appointed by bukele’s legislators ruled that he could serve a second term, breaking with a constitutional rule that prohibited consecutive terms.

Analysts fear that the adoption of bitcoin, whose transaction records are distributed over the internet, beyond the reach of national jurisdictions, could encourage money laundering.

after the bitcoin law was passed, rating agency moody’s downgraded el salvador’s creditworthiness, while its dollar-denominated bonds have also come under pressure.

The World Bank reiterated Tuesday that it could not help El Salvador adopt bitcoin “given environmental and transparency shortcomings,” a bank spokesperson said.

Our Standards: The Thomson Reuters Trust Principles.

See also: What The Biden Administration&039s Executive Order Means For The Crypto Industry – Texas A&M Today

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