Crypto Platform Bitso to Service El Salvador’s Bitcoin Wallet Chivo

Fintech Bitso, a cryptocurrency platform, said on Tuesday it will be the core service provider for Chivo, the bitcoin digital wallet launched in El Salvador as it becomes the first country in the world to adopt bitcoin as legal tender. Silvergate Bank, a California state-chartered commercial bank and a United States Federal Reserve member will work with Bitso to facilitate U.S. dollar transactions for the Chivo wallet. Athena Bitcoin will provide some front-end services and Chivo’s ATM-related operations, while Algorand will act as the official blockchain provider.

Launched Tuesday, the state-issued Chivo wallet is designed to enable individuals and businesses to send payments in Bitcoin or dollars from anywhere in the world. The wallet is available on Android and iOS, allowing users to automatically convert Bitcoin transactions into dollars or keep their Bitcoin holdings and later withdraw them in cash from 200 Bitcoin ATMs installed across the country.

Following the Chivo wallet launch, Salvadoran President Nayib Bukele reported that temporary capacity errors on the platform were causing app installation issues. Bukele said that Chivo will temporarily disconnect its systems to fix the issue. The president also noted that Chivo would be available for Salvadorans in the U.S. and “almost every country in the world.”

Founded in 2014, Bitso is a major cryptocurrency platform in Latin America, backed by large crypto companies like U.S. crypto exchange Coinbase and Ripple. The exchange saw its user base almost tripling from 1 million in July 2020 to nearly 3 million users by September 2021. In late August, the company hired Facebook veteran Vaughan Smith as the chief operating officer, following a $250 million capital raise earlier this year.

President Bukele announced legislation to accept Bitcoin as legal tender alongside the U.S. dollar in early June, aiming to bank the unbanked population by using the digital currency as 70% of Salvadorans lack access to basic financial services. The bill subsequently passed the nation’s Legislative Assembly and was scheduled to be enforced on Sept. 7.

Many people in El Salvador have opposed the government’s plans to adopt Bitcoin as legal tender, citing volatility and security concerns, spurring several protests. According to El Salvador’s Central American University’s Institute of Public Opinion survey, 70% of Salvadorans believe that Bukele’s Bitcoin law — which recognizes the cryptocurrency as legal tender — should be repealed. Over 90% of survey respondents also said they have a poor understanding of cryptocurrency.