Hi everyone, My name is Guillermo, just a Salvadoran guy that wants to give out information about the Chivo wallet app in case you didn't know.
As you know Bitcoin will become legal tender in El Salvador, the law passed Congress and will go into effect on September 7. The government of El Salvador has created the Chivo wallet app, this is how it's supposed to work, let me know what you think.
Implementation:
The government will give to every Salvadoran the equivalent of $30 in BTC, all you need to do is open an account using the Chivo wallet. Yes, it will ask for you government issued ID, facial recognition, etc.
You will have 2 different balances: USD balance and BTC balance, in the same app.
You will see your BTC balance fluctuate as the price of BTC goes up or down.
Your USD balance will NOT change.
You can transfer money between your 2 balances.
Every merchant is mandated to accept BTC if the customer wants to pay in BTC, but since the app has 2 balances, you as a merchant can receive it in USD and keep it that way. In other words, it's totally optional if you receive Bitcoin or USD in your app, the customer paid in BTC though.
El Salvador citizens can convert the cryptocurrency to USD and withdraw it in cash at Chivo ATMs.
Fees: neither the sender nor the receiver will pay any fees when buying something, receiving a payment or withdrawing USD using the Chivo wallet app.
You can use whatever wallet you like, Chivo wallet is just the most convenient way to make and receive exact payments, withdraw USD from an ATM, or convert BTC to USD, commission free.
The government will assume price variations, they have created a $150,000,000 fund to back BTC to USD conversions (like a liquidity pool I think).
More than 200 Chivo ATMs and 50 kiosks are now being installed in the country, they will open on September 7.
The initial amount of $30 deposited in BTC after opening your account is to incentivize the use of BTC.
Chivo wallet does not consume your mobile data, you just need to have internet signal from your provider.
As a Salvadoran I really wish this to be successfully implemented, if so, we may see huge economic growth.
I'm just concerned about one thing. If you pay attention, you can keep "USD" in your Chivo wallet account, these dollars didn't make it into the formal El Salvador economy bank system, part of that is in reality BTC that was transferred from abroad and converted into USD inside the app.
If my people don't learn the true value of BTC and it's convenience to make payments using the lightning network, and decide to use the app only to receive remittances and withdraw dollars, we may face a USD shortage.
But the other side of the coin is interesting too. Some economists think that the real reason the government wants to do all of this is because they want to reduce the USD in circulation in our economy (to protect the country in case anything happens to the USD, you know in case the bubble explodes lol) and to do so, they are making Bitcoin legal tender, so they can make everyone use the Chivo wallet app and use the USD that won't be circulating in the traditional system to create a government e-coin pegged to our USD reserves. Think about it, seriously, read that again, that's possible, by reducing the USD in circulation you can use it to back a different asset legally to pay short term debt, El Salvador desperately needs to pay foreign debt, if the government creates a new coin they may have more control over its own debt or mint more coins if they need it.
This could be genius, but also a catastrophe, let me know what you think
[link] [comments]
Comments
Post a Comment