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Tuesday, June 28, 2022

Amid backlash from IMF, El Salvador changes tech provider for its ‘Chivo’ wallet

The El Salvadoran government deposited $30 in Bitcoin in every citizens' Chivo wallet as ‘seed money’ to propel Bitcoin transactions.

By: Tech Desk | Pune |
Updated: February 2, 2022 11:49:30 am
El Salvador in September became the first country in the world to adopt bitcoin as legal tender. (File Image)

El Salvador has changed the frontend and backend technology provider for its “Chivo” wallet in an apparent bid to fix a series of problems that have plagued its state-run bitcoin wallet. This development comes as the International Monetary Fund (IMF) recommended that Central American nation to drop the use of Bitcoin as currency.

Chivo wallet is a crypto wallet for citizens to facilitate transactions in Bitcoin. The El Salvadoran government deposited $30 in Bitcoin in every citizens’ Chivo wallet as ‘seed money’ to propel Bitcoin transactions. Chivo is also in the process of deploying 1,500 Bitcoin ATMs around the country to more readily serve the Salvadoran population. By the end of 2021, around 75 per cent of the population had downloaded Chivo.

Crypto software firm AlphaPoint will support the frontend and backend infrastructure that powers the wallet and integrates the entire ecosystem including the mobile application, mobile point-of-sale processing, merchant website portal, call-center support software, and administrative console.

According to the report by the New Scientist, the citizens of El Salvador were reporting that their Bitcoin has been disappearing from their Chivo wallets. It should be noted that 50 such complaints have already been identified by El Comisionado till now. “The government has not responded, nor does it acknowledge the errors. It is one of the things people are demanding, that they respond to their complaints. Many have waited several months for a response to get the money back,” El Comissionado told the New Scientist.

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“El Salvador and President Bukele are truly leading globally with this first major experiment in Bitcoin adoption at a country-wide level,” Igor Telyatnikov, Co-founder and CEO of AlphaPoint said. “No one else has attempted to execute a project of this size.”

Meanwhile, the government of El Salvador rejected the recommendation by the IMF to drop Bitcoin as legal tender in the Central American country, with its Treasury Minister Alejandro Zelaya stating “no international organization is going to make us do anything, anything at all.” Zelaya told a local television station that Bitcoin is an issue of “sovereignty” and that “countries are sovereign nations and they take sovereign decisions about public policy.”

A statement issued by the El Salvador government stated, “The Government of President Nayib Bukele informs that the American company AlphaPoint is providing technology for Chivo Wallet, the first national digital wallet in the world. AlphaPoint, which provides financial technology to institutions globally, is adding its expertise to offer financial services and access to Bitcoin for millions of Salvadorans who are actively using the Chivo wallet.”

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