Salvador street protest breaks out against bitcoin adoption

By Wilfredo Pineda

A person holds a sign that reads 'The Bitcoin bill must be repealed, it will bring more corruption and poverty', as people participate in a protest against the use of Bitcoin as legal tender, in San Salvador, El Salvador, September 7, 2021. REUTERS/Jose Cabezas

More than 1,000 people marched in El Salvador's capital on Tuesday to protest the adoption of bitcoin as legal tender, amid a bumpy initial rollout of systems to support the digital currency.

The protesters burned a tire and set off fireworks in front of the Supreme Court building around noon local time, as the government deployed heavily militarized police to the site of the protest.

A man sells shirts as people participate in a protest against the use of Bitcoin as legal tender, in San Salvador, El Salvador, September 7, 2021. REUTERS/Jose Cabezas

"This is a currency that's not going to work for pupusa vendors, bus drivers or shopkeepers," said a San Salvador resident who opposed the adoption of the cryptocurrency. Pupusas are a traditional Salvadoran corn-based food.

"This is a currency that's ideal for big investors who want to speculate with their economic resources."

The protest came as El Salvador's government was rushing to iron out technological snags in bitcoin's first-day rollout.

A person holds a sign that shows President Nayib Bukele, as people participate in a protest against the use of Bitcoin as legal tender, in San Salvador, El Salvador, September 7, 2021. REUTERS/Jose Cabezas

Earlier on Tuesday, Salvadorans trying to download the Chivo digital wallet found it was unavailable on popular app stores. Then Bukele tweeted that the government had temporarily unplugged it, in order to connect more servers to deal with demand.

A group of people in Chivo tee-shirts at a stall to train people interested in using the app milled around waiting for it to be reconnected.

It later appeared on Apple and Huawei's stores, and Bukele used Twitter to ask users to let him know how it was working.

A soldier stands guard while people ask for information about the use of Bitcoin, outside an ATM of Chivo wallet, a Bitcoin wallet that Salvadoran government is launching for the use of Bitcoin as a legal tender, in San Salvador, El Salvador, September 7, 2021. REUTERS/Jose Cabezas

Polls indicate many Salvadorans are wary of the volatility of the cryptocurrency, which can shed hundreds of dollars in value in a day. That view is shared by many economists worried at how it will affect economic stability.

However, others have embraced it as a way ordinary people in a poor country can invest in financial markets.

Ahead of the launch, El Salvador bought 400 bitcoins worth around $20 million, Bukele said, helping drive the price of the currency above $52,000 for the first time since May. Hours later, however, bitcoin had weakened and last traded down 8.84% at $47,327.32. [L8N2Q927A]