Protests broke out Wednesday in El Salvador, after Bitcoin witnessed it’s biggest crash in nearly a month, just a day after El Salvador became the first country in the world to adopt the popular cryptocurrency as a legal tender.
The country’s president, Nayib Bukele, announced on Monday that they had acquired roughly $21 million bitcoin worth in order to uplift the circulation of the digital currency among its citizens.
This came three months after the president had announced in June that he has sent a bill to the country’s parliament for a vote on the currency’s adoption.
Lawmakers in the Central American country voted by a “supermajority” in favour of the Bitcoin Law, which received 62 out of 84 of the legislature’s vote. The price of bitcoin was up 5 per cent to $34,239.17 shortly after the vote.
Nearly 24-hour after El Salvador’s Bitcoin policy took effect, Bitcoin crashed to its lowest in nearly a month. It fell from the $52,000 benchmark it has been trading in days to below $43,000 at some point.
Over 1,000 protesters took to the streets of San Salvador to vent their plights, opposing the Latin American country’s adoption of Bitcoin as a legal tender amid a bumpy digital rollout.
Protestors started at least one fire and set off fireworks in front of the Supreme Court.
The government deployed armed police in San Salvador to control the crowds.
The crash in the price of the currency happened as platforms such as Apple and Huawei weren’t offering the government-backed digital wallet, known as Chivo, and servers had to be pulled offline after they couldn’t keep up with user registrations. So it was unplugged in order to increase its capacity.
As a result of this, those that wanted to download Chivo wallet, the official El Salvador Bitcoin digital wallet, found it was unavailable on popular app stores.
Several who had gathered at a Chivo bitcoin ATM in central San Salvador to conduct transactions had to leave disappointed as the app was down.
“We have disconnected it (the Chivo system) while we boost the capacity of the image capture servers,” Bukele tweeted in the morning, urging “a bit of patience” from those keen to join the experiment.
Eventually by late afternoon, the Chivo app was restored and Bukele retweeted videos of people making bitcoin payments at retailers like Mcdonald’s and Starbucks.
On social media, bitcoin enthusiasts bragged about paying for burgers or pizzas at fast food restaurants, though not using the government app but other third-party platforms already in existence.
Ahead of its launch, El Salvador purchased some $20 million worth of Bitcoin, saying it’s a way for ordinary people to invest in financial markets. The government has even given Salvadorans $30 each of Bitcoin to encourage its adoption. It says bitcoin could save the country $400m a year in transaction fees on funds sent from abroad.