scorecardEl Salvador’s Chivo wallet is returning with a new service provider
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El Salvador’s Chivo wallet is returning with a new service provider

El Salvador’s Chivo wallet is returning with a new service provider
Investment2 min read
Bukele    Business Insider
  • The Chivo Wallet has struggled with front-end and backend issues since it came into being in September this year.
  • American AlphaPoint will be the new service provider maintaining Chivo.
  • The IMF had earlier recommended that El Salvador suspend its efforts to make Bitcoin legal tender.
El Salvador’s bug-ridden Chivo wallet is coming back with a new crypto software provider. On February 1, crypto software provider AlphaPoint announced that the company has signed up to become the technology provider for the wallet.

The Chivo wallet serves as the primary means of transaction for El Salvadoreans who want to use Bitcoin as legalised currency. However, the wallet has been plagued by bugs and breakdowns, which could deter users from depending on it. Especially given that legalised currency would essentially become part of the country’s domestic infrastructure.

Coindesk reported that AlphaPoint has started “shoring up” the “problematic” front end and back-end infrastructure deployed on the Chivo wallet. The company will now provide not only the technology for the wallet, but also for point-of-sale operations, merchant websites, and call centre, software and administrative support. The agreement with El Salvador is the first government contract for the American crypto finance technology firm.

Salvador’s move comes despite the fact that the International Monetary Fund (IMF) had recommended that the country should dissolve its $150 million fund, which was created to support Bitcoin as legal tender.

Chivo breakdowns

According to a tweet by Nayib Bukele, Salvador’s President, on January 19 the Chivo wallet already has four million users, which would suggest that an overwhelming majority of the country’s population has already signed up. El Salvador’s population stands at 6.5 million, according to various estimates and Bukele’s own tweet.

However, the government has struggled to keep up with this demand. The country launched the Chivo wallet in September 2021, shortly after passing a legislation to formally accept Bitcoin as currency within its borders. Since then, multiple reports — both on social media and through various publications — have cited problems with the app’s functioning and an inability to keep up with the traffic.

“I have been waiting for almost two months for them to help me with a transaction of almost $1000 at the time, now with the value of btc plummeting and it will continue like this, apparently it is much less, I am still waiting for one day they can solve it and for pleasure,” a user tweeted on December 10, 2021. The tweet was originally posted in Spanish.

The wallet’s functioning has been quite opposed to Chivo’s meaning in local Salvadoran slang — it’s supposed to mean ‘cool’. Users who sign up for the wallet get $30 in Bitcoin for signing up and do not have to pay commission on transactions to other users of the app.