The Daily Update: El Salvador's Bitcoin Rocky Start

Probably not the start they were expecting. On the day El Salvador became the first country to accept Bitcoin as legal tender, the president, Nayib Bukele, spent a large part of his day providing technical support from his Twitter account after the digital wallet used for transactions was deactivated. At one point, Bukele even tweeted: ‘Those of you who have downloaded @chivowallet and are still not registered, can you do us the favour of trying to register and put in the comments if there is any error or if the process works well?’.

Bitcoin itself dropped by as much as 17% yesterday, to just above 43k, its lowest print for a month. Not that it fazed Bukele, who took the drop in value as an opportunity to add 150 coins to the country's reserves, now totalling 550 coins. Just how you price services and goods on a currency that has double digits percentage moves, sometimes daily, is beyond us.

It seems it is also beyond the IMF. As the managing director of the IMF, Kristalina Georgieva, said recently ‘How do we know what is collected in taxes when bitcoin goes up and bitcoin goes down? How do we plan for expenditures? Remember in April, bitcoin crossed $65,000 and then it dropped almost half of it. That is a problem that the ministry of finance is going to be wrestling with. And it is not an easy one’.

Have a great day.