El Salvador’s Chivo bitcoin wallet has already crossed 500,000 users, as revealed by local news reports.
El Salvador’s digital bitcoin wallet Chivo has already hit half a million users, according to reports from local media. The country introduced the wallet on Sept 7.
Users receive $30 in bitcoin when they download the wallet for the first time as an incentive. As of Sept 7, the country had purchased 400 bitcoins for its coffers — which by all accounts is ambivalent in terms of its success.
El Salvador’s bitcoin integration is off to a somewhat rocky start, as there have been several protests against its adoption. Protests have come from both opposition forces and citizens — with the latter marching in the streets and even filing a lawsuit.
The country has used a number of measures to incentivize people to use bitcoin. Foreigners, for example, are exempt from paying capital gains tax on their bitcoin profits. In addition, they receive permanent residency if they decide to move and have an entrepreneurial venture.
Some El Salvadorians have taken to Reddit to talk about the general sentiment surrounding bitcoin. The country celebrated its Independence Day on Sep. 15, and many protested against the current government in the streets. News broke that vandals destroyed bitcoin ATMs in the country, which is further evidence of displeasure with the new law.
One Redditor spoke about bitcoin further cementing existing inequalities — a concern that was one of the major issues citizens have with the government. They also note that the bitcoins in the Chivo wallet could be seized by the government.
One thing that cannot be denied is the fact that BTC payments do indeed reduce costs for cross-border payments. Other countries in the region are keeping a close eye on the development, which is the first of its kind.
Will more countries follow?
It’s unlikely that a large swathe of countries will follow El Salvador’s lead. Most governments are determined to release their own central bank digital currency (CBDC). Those that have accepted cryptocurrencies as an asset class have done so begrudgingly and are laboring to form a regulatory framework.
The idea of making bitcoin legal tender has been rebutted by China, India, and Russia. With important economies dismissing the asset as having such an important role in the economy, most other countries will likely take the same position.
Having said that, the El Salvador bitcoin experiment could turn up some surprising results. If bitcoin does indeed become the medium for cross-border transactions, then this could encourage more countries to do the same.