On Wednesday, Nayib Bukele, Salvadoran President, stepped in to oversee the fraught rollout of a payments app. This is what underpins the country’s adoption and legalization of bitcoin. He also asked users to report any issues on his Twitter feed.
In a similar manner to IT departments at offices around the globe, Mr. Bukele requested that users close the app and restart it if an ‘currently under maintenance’ error screen appears.
Problems have hampered the historic adoption of bitcoin by a Central American country as legal tender. This has led to a global resurgence in the price of the digital currency.
Bitcoin lost ground on Wednesday and closed at $46,000. This is a decrease of 1.7%.
“Any financial innovation of this magnitude is going to have teething problems. But, we have learned something from the last year’s markets: bitcoin maximalists will try to push the digital currency up as fast as it has fallen. This is according to Michael Kamerman chief executive of Skilling, a fintech company that is owned by Scandinavians.
Market watchers believe that bitcoin is heading in a bullish direction. A new team of cryptocurrency researchers at Standard Chartered predicts that bitcoin will reach $100,000 by the beginning of next year. It could also be worth up to $175,000 over the long-term.
Over the past 36 hours, Mr Bukele sent out a series of tweet messages instructing users how to download the government-backed Chivo App. This app promises commission-free transactions and is expected to be adopted by his administration.
The president stated that the app, which is a digital wallet, was being disengaged for the second consecutive night to improve user experience and solve any problems it encountered during the day.
He wrote, “We hope that tomorrow will have much better,” in a tweet.
Many users responded in the comments section to report ongoing problems with installation.
Douglas Rodriguez, El Salvador’s central bank chief, stated that the “eyes of all the world” were focused on his country during an event held in Tegucigalpa, Honduran capital. He also said that bitcoin adoption would take time to mature.
Rodriguez stated that the rules for bitcoin use were created to comply with money laundering standards. This was in response to concerns about the potential promotion of illicit activity.
The bitcoin law in El Salvador states that the exchange rate between cryptocurrency and the U.S. Dollar, the country’s legal tender, will be determined by the market. It states that all prices can be expressed in bitcoin, and that tax contributions may be made in digital currency. However, currency transactions in bitcoin are exempt from capital gains taxes.
The app’s rollout in El Salvador was successful despite technical difficulties. This is partly due to the $30 government grant to each local user.
Chivo was the number one app in Apple’s App store El Salvador edition. On Wednesday, Chivo was the No. 1 financial app downloaded.
To avoid any rush that could lead to system collapse, Mr Bukele stated earlier that only a handful of phone models would have access to the Alphabet app on Google Play.
He tweeted Wednesday afternoon that Google Play was now available for Alcatel smartphones. He also stated that additional models would be added to the site, but that it was important not to overload the servers with too many registrations.
He said, “We are still fine-tuning the small details.”
Reuters couldn’t immediately tell how many times the app was downloaded.
JP Morgan Chase stated in a Wednesday note that technical issues are to be expected.
The bank stated that these technical issues shouldn’t be surprising considering the fact that the country only had three months to prepare for the grand experiment. “In stark contrast, China has been testing and preparing its digital currency for many years but has not yet officially launched it.”
Some stores in El Salvador, which include McDonald’s Corp. and Starbucks Corp., accepted bitcoin from global retailers.
Mr. Bukele, 40 years old, is performing well in opinion polls, but has been accused by some of eroding democracy. He has heavily used social media for governance and engagement with Salvadorans.