El Salvador is planning to close or privatize its cryptocurrency wallet “Chivo,” created by President Nayib Bukele when the country made bitcoin legal tender in 2021. This decision follows a $1.4 billion loan agreement with the International Monetary Fund, which suggests that private businesses will choose whether to accept bitcoin. While Chivo may be discontinued, the government intends to continue buying bitcoin to strengthen its reserves. Public interest in using bitcoin has been low, with around 88 percent of Salvadorans not using it as of 2023. Despite the challenges, El Salvador still holds approximately 5,969 bitcoins valued at around $582 million.
El Salvador’s Bitcoin Wallet to Be Sold or Closed
El Salvador has announced that it will either privatize or close its government-backed cryptocurrency wallet known as “Chivo.” This decision comes in the wake of a $1.4 billion loan deal with the International Monetary Fund (IMF) aimed at addressing the country’s controversial adoption of bitcoin as legal tender.
According to Stacy Herbert, the director of El Salvador’s National Bitcoin Office, the Chivo wallet, which was launched by President Nayib Bukele in September 2021, will no longer serve its original purpose. Although bitcoin will remain legal in the country, she confirmed that the government plans to either sell the wallet or shut it down. However, no information has been shared regarding the number of users currently utilizing the digital wallet.
Herbert emphasized that El Salvador intends to continue acquiring bitcoin, potentially increasing its purchasing pace for the Strategic Bitcoin Reserve. The IMF has stated that under the new loan agreement, private sector acceptance of bitcoin will be voluntary, and efforts will be made to mitigate the risks associated with cryptocurrency. Furthermore, the public sector’s involvement in bitcoin transactions is expected to be limited.
In 2021, El Salvador made headlines when it became the first nation in the world to declare bitcoin as legal tender. This bold move aimed to boost an economy heavily reliant on remittances from abroad. However, feedback from the public suggests that the decision has been met with skepticism; a survey revealed that around 88 percent of Salvadorans did not use bitcoin in 2023.
El Salvador’s current holdings include approximately 5,969 bitcoins, valued at roughly $582 million. As the nation navigates the complexities of adopting cryptocurrency, the future of both bitcoin and the Chivo wallet remains uncertain.
Relevant Tags: El Salvador, Bitcoin, Chivo Wallet, Nayib Bukele, International Monetary Fund, Cryptocurrency News
What is happening with El Salvador’s crypto wallet?
El Salvador is considering selling or shutting down its crypto wallet, called Chivo. This decision comes amid challenges the country has faced with Bitcoin.
Why is El Salvador thinking of selling or closing the wallet?
The move may be due to lower usage and concerns about the country’s overall experience with Bitcoin. Many people in El Salvador have not used the wallet as expected.
What will happen to users’ funds if the wallet shuts down?
If El Salvador shuts down the Chivo wallet, officials say they will ensure that all user funds are safe and available to access through other means.
How does this decision affect Bitcoin in the country?
This decision may indicate a shift in how El Salvador views Bitcoin as legal tender. It could affect public confidence in using Bitcoin for everyday transactions.
What should users do now?
Users should keep an eye on updates from the government about any changes. It’s also a good idea to stay informed about their funds and consider backup options for storing Bitcoin securely.
