El Salvador President Nayib Bukele announced that each adult El Salvadorean would receive $30 Bitcoin. This will happen in the official Chivo wallet upon successful registration on June 25. The country declared BTC to be the legal tender in the Latin American country.
Advantages of Officially using BTC – Chivo Wallet
Besides the obvious advantages of being able to hold, convert and transact both Bitcoin and a virtual form of the American Dollar (USD) without commission or fees. Chivo wallet is also compatible with other Bitcoin wallets. And there’s no compulsion and users can use other wallets, if they so desire. But, it does require entering a lot of personal information, collected in the name of loss and theft prevention.
Users still don’t know what kind of security features the official Chivo wallet would have. Generally, having the need to enter personal information doesn’t sit well with cryptocurrency users, who place emphasis on decentralization and anonymity. However, Mr. Bukele assured the El Salvadoreans that they aren’t giving any information, which the Govt doesn’t already have.
How will the process Happen?
El Salvadoreans will be able to withdraw money received in Bitcoin to actual USDs through actual physical locations processing such transactions and through ATMs. But the $30 airdrop in Bitcoin can’t be withdrawn into US dollars as the Govt wants to promote Bitcoin usage in the country. Once they are sent to another wallet, the restriction won’t apply anymore. Chivo wallet would launch in Sep 2021, as per its official Twitter.
The only issue? From its available descriptions at this point, the Chivo wallet doesn’t appear to be a truly decentralized hold-your-own-private-key type wallet as any on-chain wallet would have to pay fees and wouldn’t be able to convert seamlessly between Bitcoin/USD as there are no such native services on the Bitcoin blockchain. It remains to be seen as to what is the true nature of this newly launched solution.