El Salvador is planning to sell or close its crypto wallet

El Salvador will privatize or close the Chivo cryptocurrency wallet created by President Nayib Bukele when he rolled out fiat bitcoin in 2021, an official said Thursday.

The announcement came after the Central American country’s government reached a $1.4 billion loan agreement with the International Monetary Fund that addressed its controversial embrace of bitcoin.

While bitcoin remains a legal tender in El Salvador, the chivo “will be sold or discontinued,” Stacy Herbert, director of Bukele’s national bitcoin office, wrote on social media platform X.

It did not say how many people used the digital wallet, which the government created in September 2021 for Salvadorans to make payments in bitcoin.

“El Salvador will continue to purchase Bitcoin (likely at an accelerated pace) for its strategic Bitcoin reserve,” Herbert added.

The International Monetary Fund said on Wednesday that under the loan agreement, the acceptance of bitcoin by the Salvadoran private sector will be voluntary, adding that risks related to bitcoin are “mitigated.”

“For the public sector, participation in economic activities related to Bitcoin, transactions and purchases of Bitcoin will be restricted,” she added.

In 2021, El Salvador became the first country in the world to establish Bitcoin as a legal tender in an attempt by Bukele to revitalize a dollar-based economy that relies on remittances.

On December 1, the ringleader admitted in a speech that the introduction of bitcoin was “the most popular action this government has taken.”

About 88% of Salvadorans did not use Bitcoin in 2023, according to a survey by the University of Central America.

According to the National Bitcoin Office, El Salvador has 5,969 bitcoins worth about $582 million.

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