Salvadoran President Nayib Bukele stepped in on Wednesday to manage the fraught rollout of a payment app that supports the country’s adoption of bitcoin as legal tender, and urged users to report any concerns on his Twitter feed.
Using a language similar to IT departments in offices around the world, Mr. Bukele asked users to close and restart the app if a “currently under maintenance” error screen appeared.
The historic acceptance of bitcoin as legal tender by the Central American country has been beset by issues that have contributed to a global decline in the digital currency’s price.
Bitcoin continued to lose ground on Wednesday, closing at $46,000, down 1.7%.
“Any financial innovation on this scale will come with teething troubles. However, if we’ve learned anything from watching the markets over the past year, it’s that bitcoin maximalists will try to push the digital currency back up as quickly as it did. has fallen,” said Michael Kamerman, CEO of Scandinavian fintech company Skilling.
Some market watchers see a bullish future, with a new cryptocurrency research team at Standard Chartered predicting that bitcoin will hit $100,000 early next year and could be worth as much as $175,000 longer term.
Mr Bukele has been sending out a stream of Twitter messages in the past 36 hours instructing users on how to download the government-backed Chivo app that promises commission-free transactions and which his government hopes will be adopted by unbanked people.
Last night, the president said the app, a digital wallet, was being disconnected for the second time to “improve the user experience and the problems he had during the day.”
“We hope tomorrow will be much better,” he wrote in a tweet.
Several users responded in its comments section to report ongoing installation issues.
Douglas Rodriguez, head of El Salvador’s central bank, said at an event in the Honduran capital, Tegucigalpa, that the “eyes of the world” were on his country and that the adoption of bitcoin was a process that took time to “settle”. ripen”.
Addressing concerns that the digital currency could encourage illegal activity, Mr Rodriguez said the rules put in place by the bank for the use of bitcoin were designed to comply with money laundering standards and were well received by international authorities.
El Salvador’s bitcoin law states that the market will determine the exchange rate between the cryptocurrency and the US dollar, the country’s other legal tender. It states that all prices can be denominated in bitcoin and tax contributions can be paid in digital currency, while currency transactions in bitcoin are not subject to capital gains tax.
Despite technical hiccups, the app’s rollout caused some waves in El Salvador, partly due to a government handout of $30 in bitcoin to every local user who signs up, and despite polls showing that many people are wary of Bitcoin’s volatility.
In the El Salvador edition of Apple’s App Store, Chivo was the number 1 downloaded financial app on Wednesday.
Bukele previously said only a few phone models would initially be able to access the app on Alphabet’s Google Play to avoid a rush that could cause the system to collapse.
On Wednesday afternoon, he wrote on Twitter that Google Play was available for Alcatel smartphones and that more models would be added, although it was important not to “saturate the servers” with too many logins at once.
“We’re still refining small details,” he said.
Reuters could not immediately determine how often the app had been downloaded.
JP Morgan Chase said in a note on Wednesday that some technical issues are to be expected.
“These technical difficulties should come as no surprise given that the country had only three months to prepare for this grand experiment,” the bank said. “In sharp contrast, China has been preparing/testing its digital yuan for years and has yet to officially launch it.”
Global retailers operating in El Salvador accepted bitcoin in some stores, including McDonald’s Corp and Starbucks Corp, along with several local outlets.
Mr Bukele, 40, who is doing well in opinion polls but accused of eroding democracy, has made heavy use of social media to govern and interact with Salvadorans.