London Daily

Focus on the big picture.
Saturday, May 31, 2025

El Salvador's national Bitcoin system crashes as cryptocurrency becomes legal tender

El Salvador's national Bitcoin system crashes as cryptocurrency becomes legal tender

The Chivo Wallet system crashed on Tuesday when a recently passed law recognising Bitcoin as legal tender in El Salvador took effect.

El Salvador's move to become the first country in the world to make Bitcoin legal tender was marred on launch day when the government's digital wallet system crashed.

President Nayib Bukele confirmed that the Chivo Wallet had been taken offline following complaints about installation problems. No time has been given for when it will be online again.

He said that server capacity was being increased - a "relatively straightforward problem to fix", but one that needs the system to be disconnected.

"Mejor despacio y con buena letra," he tweeted, an idiom that translates as "slowly and with good handwriting" - meaning that it's better not to rush.

"Un poquito de paciencia," he added, meaning "a little bit of patience".

Salvadorans have protested against Bitcoin becoming legal tender


Even the Chivo Wallet's website was taken down on Tuesday when a recently passed law recognising Bitcoin as legal tender in El Salvador took effect.

Citizens have protested against it, complaining that there has been too little explanation from officials about what benefit Bitcoin will bring and how transactions using the cryptocurrency will work.

Claudia Molina, a 42-year-old who sells T-shirts and souvenirs, criticised the plan.

"We don't know the currency. We don’t know where it comes from. We don't know if it's going to bring us profit or loss. We don’t know anything," she told Reuters.

"They haven't given us training. They haven't told us what we're going to use or how to make the change," she added.

El Salvador previously adopted the US dollar as legal tender in 2001


Foreign cryptocurrency enthusiasts have supported El Salvador's move, with a movement stirring for people to buy $30 (£21.76) in the cryptocurrency together to mark the law coming into effect, potentially driving up the price.

Bitcoin has been trading steadily at around $51,000 (£37,000) over the past few days - its highest since May, when it fell sharply after China announced curbs on cryptocurrency transactions - but no price pump has materialised.

El Salvador has begun to install Bitcoin ATMs in cities around the country where citizens will be able to convert their digital tokens into cash, backed by a $150m (£108m) government fund.

Polls have reported that most Salvadorans are opposed to the adoption of Bitcoin, despite the government pledging to provide $30 (£22) in the token to each citizen through the state-provided digital wallet.

President Nayib Bukele confirmed that the digital wallets system was crashing


Carlos Carcah, a professor at El Salvador's Superior School of Economics and Business, argued that adoption of Bitcoin as legal tender "is not necessary, nor convenient".

He added: "As long as there is someone who accepts payment with Bitcoin, the same as they accept dollars, there wouldn't be problems."

He noted that Bitcoin is extremely volatile, so investors "run the risk of becoming rich and the next day being poor".

El Salvador's own currency, the Salvadoran colon, was replaced by the US dollar in 2001.

The country depends heavily on money which citizens based abroad, often in the US, send home and these remittances to El Salvador were worth almost $6bn in 2019, amounting to 16% of El Salvador's gross domestic product.

The country moved to using the US dollar as legal tender as a result of these remittances, and the move to Bitcoin is based on an expectation that more Salvadorans will begin sending money home using the cryptocurrency - and the Chivo Wallet is intended to be available to citizens who are residing abroad.

Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×