El Salvador to Shut Down Chivo Wallet

El Salvador is set to shut down or privatize its state-backed Chivo crypto wallet as part of a $1.4 billion deal with the International Monetary Fund (IMF). This move follows President Nayib Bukele's controversial decision to make Bitcoin legal tender in 2021, a measure that has faced significant public disapproval, with a survey indicating 88% of Salvadorans did not use Bitcoin in 2023. Despite the planned discontinuation of Chivo, Bitcoin will remain legal tender, and the government will continue to add to its Strategic Bitcoin Reserve, which currently holds approximately 5,969 Bitcoins valued at around $582 million. The IMF's agreement stipulates that Bitcoin transactions for the public sector will be restricted, while private sector acceptance of Bitcoin will be voluntary. The IMF has expressed concerns regarding the risks associated with Bitcoin, prompting these concessions from El Salvador. The closure of Chivo does not impede the country's overall pro-Bitcoin stance, as private wallets will continue to operate.