After the digital wallet used for transactions was deactivated on the day El Salvador legalized bitcoin as legal tender, its president spent the morning on Twitter providing technical support.
The country’s Chivo wallet, which gives local customers $30 worth of bitcoin for free, went live at midnight, but was taken down five hours later due to a shortage of server capacity.
President Nayib Bukele, who appeared unmoved, pleaded for patience and stated that the government had purchased another 150 bitcoins, bringing the total holdings to 550 ($26 million). Then he retweeted a US bitcoin journalist who had used the money to pay for his McDonald’s breakfast.
“Those of you who have downloaded @chivowallet and are still not registered, can you do us the favour of trying to register and put in the comments if there is any error or if the process works well?” Bukele tweeted at one point.
More than 1,000 people joined a protest outside the Supreme Court in San Salvador later on Tuesday, burning tyres and lighting off fireworks.
“This is a currency that’s ideal for big investors who want to speculate with their economic resources,” one protestor said in an interview.
Meanwhile, bitcoin’s value plunged from more than $52,000 per coin to $42,000 early Tuesday, before recovering almost half of that loss, demonstrating the currency’s ongoing volatility.
Bukele’s critics cautioned that the international media frenzy around bitcoin’s acceptance had served to divert attention away from the president’s consolidation of political power – and steady degradation of democratic institutions.
Meanwhile, bitcoin’s value plunged early on Tuesday, from more than $52,000 per coin to $42,000, before recovering about half of that loss, demonstrating the currency’s ongoing volatility.
Bukele’s critics cautioned that the international media frenzy around bitcoin adoption has served to divert attention away from the president’s consolidation of political power – and steady degradation of democratic institutions.
“There has been a high degree of improvisation in the rollout of Chivo and a great deal of opacity,” says local economist Ricardo Castaneda. “The app asks for access to your microphone and your contacts, which are not needed for a wallet. Bitcoin might be a distraction but given the decision to push ahead with the plan despite popular opposition and the advice of experts, it could also be an important pillar of Bukele’s political project.”
According to recent studies, two-thirds of Salvadorans oppose the use of cryptocurrencies.
The country’s top court declared on Friday that the 40-year-old president can run for re-election in 2024, overturning a verdict that had barred re-election for ten years.
Bukele sent troops into parliament in February 2020 to support his military expenditure agenda. In May, he fired five judges and the attorney general as part of his self-proclaimed anti-corruption crusade, and Congress approved a legislation this week to fire all judges above the age of 60.
Meanwhile, the administration undertook covert talks with the country’s most powerful gangs, and unelected advisers, primarily his brothers and members of the Venezuelan opposition, make many of the most crucial decisions.
Bukele, a former marketing professional, is Latin America’s most popular president, with popularity ratings consistently exceeding 85% since taking office. However, due to opposition to the bitcoin bill, that percentage has dropped below 75% in recent weeks.