The first day of El Salvador’s adoption of Bitcoin as legal money was marked by angry protests, technological problems, and a drop in value.
Bitcoin’s price plummeted to its lowest level in over a month on Tuesday, falling from $52,000 (£37,730) to around $43,000 at one point.
According to an opposition lawmaker, the drop cost one of Latin America’s poorest countries $3 million.
The implementation of bitcoin in El Salvador was not at all what President Nayib Bukele had envisioned when he embarked on his risky experiment.
The government-backed digital wallet, known as Chivo, was not available on platforms like as Apple and Huawei, and servers had to be taken offline when they couldn’t keep up with customer registrations.
However, as the day progressed, Chivo began to emerge on additional platforms, including Starbucks and McDonald’s.
To encourage acceptance, the government has handed Salvadorans each $30 in Bitcoin. According to the report, bitcoin could save the government $400 million in transaction costs on cash received from overseas each year.
News outlets, however, estimate this to be closer to $170 million, based on statistics from the World Bank and the government.
President Bukele tweeted, “We must shatter the paradigms of the past.” “El Salvador has earned the right to progress into the first world.”
In San Salvador, Ed Hernandez owns a family business where clients may buy necessities like as rice, beans, and cleaning supplies. He’s completely on board.
“It will be good not to use real currency during the epidemic,” he told the news outlets, adding that it protects him from clients who pay with counterfeit notes.
El Salvador, on the other hand, didn’t get lucky with the price of Bitcoin on its first day as legal money, which dropped by 20% at one point.
“For President Bukele, his government, and his Bitcoin experiment, it was a very horrible day,” opposition lawmaker Johnny Wright Sol told news outlets.
“The vast majority of people are unfamiliar with cryptocurrency. What we do know is that the market is extremely volatile. That was undeniably demonstrated today.”
Mr. Wright Sol said that Bitcoin was an ill-advised national currency that had been hurried through: “The Bitcoin bill was passed by parliament with little deliberation. It only took approximately five hours to complete.
“We’re not anti-crypto or anti-Bitcoin, but we don’t feel that businesses should be forced to take Bitcoin as payment.
“The state is supporting these payments and taking the risk, but we’re all taxpayers at the end of the day.”
Mr. Wright Sol isn’t the only one who has criticized the film. More than 1,000 protestors gathered outside the country’s top court, setting off pyrotechnics and torching tyres.
Some believe that the adoption of Bitcoin would fuel illegal transactions, in addition to financial instability.
Mr Hernandez, the shopkeeper, is unfazed by the volatility: “I view it as a danger, certainly – but there’s a risk in everything.” When we operate a store, we occasionally purchase items that we do not intend to sell.
“However, where others see a catastrophe, I see an opportunity.”
