San Salvador, Sep 7 (EFE).- The Salvadoran government’s implementation of a plan to establish bitcoin as legal tender ran into problems Tuesday in the form of both technical glitches and street protests reflecting widespread opposition to the move.
Polls show that a majority of El Salvador’s roughly 6.5 million people are not happy to see their country become the first in the world to adopt cryptocurrency as a medium of payment.
Supporters of right-wing President Nayib Bukele pushed the bill through congress in June, approving the use of more than $200 million in public funds to finance the program.
Bukele, who made headlines in February 2020 when he led rifle-toting troops into the assembly as lawmakers were debating an increase in money for the security forces, has touted bitcoin as a way to boost the pandemic-battered economy and benefit people who lack access to the banking system.
But a significant percentage of Salvadoran individuals and small businesses are not technologically equipped to conduct bitcoin transactions.
Eighty-five percent of the 2,500 members of El Salvador’s Chamber of Commerce and Industry are mid-size, small or micro enterprises.
The government has said that while all firms are required to accept bitcoin as payment for goods and services, provisions will be made for merchants who can’t process operations in cryptocurrency.
The bitcoin legislation earmarks $150 million for a trust fund to enable the “automatic and instantaneous convertibility” of bitcoin into United States dollars, which has been El Salvador’s legal currency for more than two decades.
Some fast-food restaurants, pharmacies and supermarkets have said they are ready to accept bitcoin as payment.
In preparation for Tuesday’s launch, the Salvadoran government purchased 400 bitcoins for around $21 million, which works out to more than $52,000 per bitcoin, the highest value since May.
But the cryptocurrency fell by more 17 percent early Tuesday to $43,050.
Bukele said on Twitter that his government took advantage of the price drop to acquire another 150 bitcoins.
Columns of protesters from several different points in San Salvador converged outside the Legislative Assembly, though barbed wire erected by police kept them well away from the building.
Demonstrators carried signs with slogans such as “Enough of corruption, no to bitcoin” and “No to corrupt money laundering.”
Authorities have installed 200 bitcoin ATMs around the country and are offering “Chivo” cryptocurrency wallets preloaded with 30 bitcoins each to anyone who signs up.
People with the corresponding app on their cell phones were supposed to be able to download the wallets beginning at 12:01 am Tuesday.
A few hours later, however, Bukele announced on Twitter that the system had to be taken offline to expand server capacity.
Around 11:00 am, the president said the system was up and running.
Officials have not said how many people registered to download the Chivo wallet. EFE