El Salvador will close or privatize the Chivo wallet, introduced when Bitcoin was made legal tender in 2021. This decision follows a $1.4 billion loan agreement with the IMF, which seeks to address Bitcoin-related challenges. While Bitcoin remains legal, public adoption is low, prompting a shift in focus for the government’s cryptocurrency policies.
El Salvador is set to either privatize or shut down the Chivo cryptocurrency wallet, which was established by President Nayib Bukele when Bitcoin was made legal tender in September 2021. This announcement follows the government’s recent agreement with the International Monetary Fund (IMF) for a $1.4 billion loan that aims to address the challenges posed by the country’s adoption of Bitcoin. Although the legal status of Bitcoin remains unchanged, Chivo will see reduced engagement following this transition.
In 2021, El Salvador became the first nation globally to recognize Bitcoin as legal tender, with the intention of reviving its predominantly dollarized economy that relies heavily on remittances. The Chivo wallet was introduced to facilitate Bitcoin transactions among Salvadorans. However, citizens’ acceptance of Bitcoin has been minimal—the Central American University reported that approximately 88% of Salvadorans did not utilize Bitcoin by 2023. This has raised concerns about the viability of Bukele’s ambitious cryptocurrency initiative, especially in light of the recent IMF agreement, which advises confining public sector engagement in Bitcoin-related economic operations.
In summary, El Salvador’s decision to potentially sell or close the Chivo wallet underscores a significant shift away from Bukele’s Bitcoin strategy. Despite Bitcoin retaining its legal tender status, the low adoption among the public and the IMF’s conditional support indicate a cautious path forward. The government plans to continue building its Bitcoin reserves, signaling an ongoing, albeit limited, commitment to cryptocurrency amid economic adjustments.
Original Source: ticotimes.net
