Fintech Bitso, a cryptocurrency platform, said on Tuesday it will be the core service provider for Chivo, the bitcoin digital wallet launched in El Salvador as it becomes the first country in the world to adopt bitcoin as legal tender.
Bitso said it will work with Silvergate Bank, a US federally-regulated and California state-chartered bank, to facilitate transactions in US dollars.
"We are looking forward to working with El Salvador in an initiative that will transform payment structures and increase financial inclusion in the country," said Santiago Alvarado, vice-president of Bitso for Business.
President Nayib Bukele, who pushed for adoption of the cryptocurrency, has argued that using bitcoin will help Salvadorans save US$400 million a year on commissions for remittances, while giving access to financial services to those with no bank account.
"As the leading crypto exchange in the region, we are thrilled to bring our experience in remittances and in secure and low-friction financial services to Salvadorans," said Alvarado.
Bitso said that its services accounted for the processing of more than US$1.2 billion in remittances between the United States and Mexico in 2020 and that it would now apply its expertise to El Salvador, where some 70 per cent of people lack adequate access to basic financial services.
Salvadorans last year sent home almost US$6 billion from abroad, mostly from the United States. The sum is equivalent to some 23 per cent of the country's gross domestic product.
Bukele's government has promised US$30 of bitcoin for each user. Earlier on Tuesday, Salvadorans trying to download the Chivo digital wallet found it was unavailable on popular app stores.
Bukele said in a tweet that the government had temporarily unplugged it, in order to connect more servers to deal with demand. He blamed app download platforms for the delay.