The country’s president Nayib Bukkele announced on his Twitter that the government has purchased an additional 150 BTC, bringing up their reserve to a total of 700 BTC.
President Bukele has adopted quite an aggressive Bitcoin policy and has been purchasing them whenever the price drops. With the rollout of the Chivo wallet app following the BTC legalization, the country had bought 550 BTC in multiple buying sprees. The latest addition of 150 BTC takes their total bitcoin fund to 700.
Rocky Start For Chivo Wallet
The Chivo Wallet is an app that Salvadorans can download to smoothly transact in BTC, including sending remittances home from abroad. The implementation of the app and the complementary ATMs had a somewhat rocky beginning due to technical difficulties when it crashed, followed by BTC dipping 17%. However, the president announced soon after that the technical issues had been remedied, and the app was back in action again. The president also declared soon after that the Chivo wallet has more than half a million users, with more and more businesses in El Salvador accepting BTC payments every day.
Scrutiny Over Public Resource Spending
Over 200 ATMs were installed across the country to support the Chivo app and enable easy BTC to dollar conversion and round-the-clock cash withdrawals. However, on September 10, just a few days after the launch of the app and the ATMs, regional human rights and transparency organization, Cristosal, appealed to the Court of Accounts to investigate the construction process for the Chivo ATM booths, which were funded by public resources. Furthermore, the organization also lodged a complaint with the public resources watchdog to audit the authorization processes behind the President’s decision to buy 550 BTC.
Save Commissions, Gain Financial Independence
In related news, the BTC adoption of El Salvador is being predicted to spell trouble for money service providers like Western Union and MoneyGram, who, according to financial analyst Willy Woo, “have been responsible for clipping 1.5% of El Salvador’s GDP through their remittance fees on the poor.”
Remittances sent home by Salvadoreans living abroad account for a $6 billion industry, almost 23% of the country’s GDP. It has been the government’s intention to provide more economic democracy to the previously unbanked population of El Salvador.
CNBC’s MacKenzie Sigalos, who has investigated the El Salvador remittance industry, claimed that the new Chivo Wallet could save around $400 million a year in commissions paid to the larger financial institutions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.