Official Bitcoin Crypto Wallet "Chivo" Not Popular, El Salvador Plans to Phase It Out
An official in charge of Bitcoin affairs in El Salvador said on the 19th that the country plans to gradually phase out or privatize the official Bitcoin trading platform "Chivo Crypto Wallet" in exchange for the International Monetary Fund's agreement to provide loans, but Bitcoin will still maintain its status as legal tender.
Stacey Herbert, director of the National Bitcoin Office of El Salvador, announced this news on social media. She said that "Chivo Crypto Wallet" will "be sold or gradually scaled back."
On the 18th, the International Monetary Fund stated that according to the recently reached $1.4 billion loan agreement with the Salvadoran government, the private sector in El Salvador must accept Bitcoin on a voluntary basis, and "public sector participation in Bitcoin-related economic activities as well as transactions and purchases of Bitcoin will be restricted" in order to "mitigate" risks associated with Bitcoin.
In 2021, El Salvador designated Bitcoin as its national legal tender, setting a global precedent. The government also established the "Chivo Crypto Wallet," allowing the public to use the platform for Bitcoin and USD payments, transactions, and exchanges without paying commissions. This Central American country has an underdeveloped economy, with fiscal revenue heavily reliant on remittances from overseas citizens, and the primary circulating currency is the US dollar.
The reason Salvadoran President Nayib Bukele decided to designate Bitcoin as legal tender is that this move could reduce the cost of remittances from Salvadorans abroad, help promote investment and tourism development, and strengthen technological research and development. However, on the 1st of this month, Bukele stated in a speech that adopting Bitcoin "is the least popular measure of this government among the public." A domestic survey in El Salvador revealed that 88% of Salvadorans did not use Bitcoin last year.
Data from the National Bitcoin Office of El Salvador shows that the country currently holds 5,969 Bitcoins, with a current market value of approximately $582 million. Herbert said on the 19th that the Salvadoran government will continue, and may even accelerate, the purchase of Bitcoin to enrich the country's "Bitcoin strategic reserves."
