El Salvador's Bitcoin dream faces uncertainty as the government considers selling or shutting down the Chivo cryptocurrency wallet, developed and supported as part of the country's adoption of Bitcoin as legal tender in 2021.
Plans for Partially or Fully Selling Chivo
Stacy Herbert, director of the National Bitcoin Office, announced that the government sealed a $1.4 billion loan deal with the International Monetary Fund (IMF), which addresses their controversial approach to El Salvador's Bitcoin initiative. As part of this agreement, the Chivo wallet, supported since September 2021, may face sale or closure.
History and Aims of Chivo
The Chivo wallet was launched in 2021 as the world's first government-run digital wallet to boost cryptocurrency adoption in the country. Upon its introduction, the government offered a $30 incentive to download and use the wallet, yet it led to widespread incidents of fraud and identity theft.
International Community's Reaction
The IMF has continuously opposed the project, suggesting that while risks associated with Bitcoin adoption could lessen if it becomes more globally accepted, they maintain that public sector engagements in Bitcoin-related activities should be limited.
The new loan agreement signaling the closure or privatization of the Chivo wallet is aimed at supporting El Salvador's economy. However, it raises questions about President Bukele's pro-Bitcoin policy and the country's Bitcoin dream.
