Bitcoin legalization plunges El Salvador into chaos

September 08, 2021 | 2 minutes read

Shockingly, Bitcoin crashes on the first day as El Salvador’s legal tender

The adoption of Bitcoin as legal means of transaction pulled the Central American country into the worst mayhem and tumult. The angry protesters chanting slogans and nosedive in the value market plus technological glitches were the troubles El Salvador saw after the adoption of Bitcoin. The digital currency price crashed to its lowest in nearly a month, falling from $52,000 (£37,730) to under $43,000 at one point. 

An opposition politician said the fallout can cause the country to lose $3 million. The rollout of bitcoin in El Salvador was a bold move by President Nayib Bukele and was far from what he would have expected.

The government however offered Chivo the digital wallet but many platforms such as Apple and Huawei were not offering the government-backed digital wallet and servers also had to be pulled offline after they could not keep up with user registrations. Yet after a day, Chivo started appearing on more platforms like Starbucks and McDonald’s.

The government is encouraging Salvadorans to adopt  Bitcoin as they pay their citizens $30 for each bitcoin. It says the country can save $400m a year in transaction fees on funds sent from abroad.

The economy of the country is not in very good condition and the people of El Salvador are not very much liking the move as 1,000 protesters gathered outside the supreme court where tires were burnt and fireworks were set off. Other than the financial stability, some say the Bitcoin exchange can also fuel illicit transactions. 

This is not the only Bitcoin incident that has unfolded. As earlier this year in May Bitcoin price took a nosedive, dropping below the $40,000 mark in just one day

Image Credits: EPA