El Salvador faced a rocky transition on Tuesday in accepting Bitcoin as legal tender as the country adapted to new technology that will enable payment with cryptocurrency.
The country is the first to use Bitcoin as its official currency. Officials struggled to smooth out glitches in the new system, including with the country’s digital wallet called Chivo, which is slang for “cool.”
President Nayib Bukele tweeted Tuesday morning that the national digital wallet would be available for: Salvadorans in the United States and almost all over the world. But for a while it was not available to anyone and the country delayed its rollout.
mr. Bukele too announced on Twitter that servers were temporarily taken offline because Chivo added capacity and acknowledged problems with downloads. “We’d rather correct it before reconnecting it,” he said.
Experts expressed concern in June about the hasty adoption of the new currency and the rapid implementation of new technology on a national scale.
The bold move, largely celebrated by the international Bitcoin community, found a more skeptical reception at home and in the traditional financial world amid concerns it could bring instability and undue risk to the Central American country’s fragile economy.
Mr. Bukele, a tech-savvy millennial, has proposed the adoption of the digital currency as a way to bring more Salvadorans, about 70 percent of whom do not have bank accounts, into the formal economy. Using the cryptocurrency would make it faster and cheaper to get remittances from abroad, he has argued, and could free the indebted nation from the clutches of the traditional global financial system.
Making Bitcoin legal tender — alongside the US dollar, which the country has relied on since 2001 — is also part of Mr. Bukele against crypto entrepreneurs, who often seem to be his primary target audience. But the technical issues only highlight the practical concerns of even avid crypto enthusiasts. The project also highlights philosophical questions about the national adoption of a currency designed to thwart the government’s total control of money.
Some worry that the problems with the Salvadoran project could undermine its wider adoption, but Bitcoin’s most outspoken proponents are trying to generate excitement by lending their support to the effort.
Michael Saylor, the chief executive of software intelligence firm MicroStrategy, which owns billions in Bitcoin, on Monday encouraged enthusiasts to buy $30 of the cryptocurrency in solidarity with Salvadorans, who have been promised that amount for downloading the national digital wallet.
Spurred in part by Mr Bukele’s announcement that El Salvador had… bought 200 Bitcoins and more, Bitcoin’s price surged over the weekend, breaking $52,000 before falling to around $50,000 on Tuesday morning.