The crypto markets had been waiting for it for weeks: The introduction of Bitcoin as legal tender in El Salvador, Central America.

But the adaptation actually went less smoothly than hoped.

The day was accompanied by protests and technical problems.

Martin Hock

Editor in business.

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Initially, the centrally introduced digital wallet for Bitcoin storage called "Chivo" (which means something like "Cool") and the Salvadorans are supposed to donate 30 dollars each in Bitcoin, was not available on a number of platforms such as Huawei or Apple. When it became available, the onslaught of registrations could not be handled. This was then switched off in order to first increase the computer capacity. The “Chivo” ATMs apparently didn't work either.

Nonetheless, proponents see it as a big step forward.

The popular President Nayib Bukele, who, like Donald Trump, likes to communicate via the short message service Twitter, even said: "El Salvador has the right to advance towards the First World." "Chivo" is supposed to help the Salvadorans, 400 million dollars a year to save on commissions for transfers and at the same time give people without a bank account access to financial services, which is the majority of the population in El Salvador.

The country had de facto replaced its own currency, the Colón, with the dollar in 2001.

Little approval

"Everyone is looking to see if things are going well for El Salvador and if, for example, the cost of remittances drops significantly, countries will probably continue to want to take advantage of these advantages," said Dante Mossi, executive president of the Central American Bank for Economic Integration (CABEI). Meanwhile, he also called the launch an "alien experiment" aimed at increasing financial inclusion in a region where many people would not have access to bank accounts or credit cards. CABEI supports El Salvador technically with the implementation. The World Bank rejected this, citing environmental and transparency disadvantages.

Nevertheless, the Bitcoin introduction does not meet with unanimous approval among the people. Protesters also marched through the capital San Salvador on Tuesday with banners such as “Bukele, we don't want Bitcoin” and “No to corrupt money laundering”. According to a nationwide survey by the Universidad Centroamericana (UCA) with almost 1,300 participants in August, around 70 percent of Salvadorans reject the Bitcoin law. Around the same number of people had imprecise ideas about Bitcoin: only 4.8 percent of those surveyed correctly defined it as a cryptocurrency.

Bitcoin and El Salvador are currently not very popular in the crypto and financial markets. As early as Tuesday morning, the Bitcoin price plummeted from a high of just under $ 53,000 to $ 44,433 and has only recovered slightly from this so far. The mood is and will remain cracked, said analyst Timo Emden from Emden Research. The introduction to El Salvador turned out to be an “own goal” and a “nightmare for investors” on the first day. In addition to the financial instability of the cyber currency, its introduction could fuel illegal transactions. "Investors fear that yesterday the supervisory authorities around the globe have become aware, tighten the regulatory belt and Bitcoin and co.