El Salvador introduces fuel subsidy for bitcoin payments

In El Salvador, users of the state cryptocurrency wallet Chivo will receive a discount on fuel when paying with bitcoin. This was announced by President Nayib Bukele.

‘The state-owned Chivo company conducted negotiations with the country’s largest fuel companies so that from tomorrow, [October 1], their gas stations would sell each gallon of gasoline for $0.20 cheaper through the crypto wallet,’ he wrote on September 30.

According to him, this measure ‘undoes several increases in global fuel prices’.

‘The subsidy is unlimited and can be used by public transport, by entrepreneurs, as well as any company or private individual. It will also reduce transportation costs in supply chains,’ added Bukele.

In comments, users expressed doubts about the benefit of such a move for society.

‘These 20 cents will come from all of us, right? The gas stations will not lose; they will be reimbursed from taxes paid, including those who walk,’ wrote user under the handle Adan_3840.

Another commenter noted, that if the ‘discount’ is paid by the state operator Chivo, then it is taxpayers’ money.

Some suggested that this is an attempt to force people to use the app, which still experiences outages.

The law recognizing bitcoin as legal tender in El Salvador came into force on September 7.

Earlier in the month, Bukele acknowledged that the rollout of bitcoin payments encountered technical difficulties, which he promised to resolve in “the coming days”.

On October 1, he said that the number of Chivo app users reached 2.73 million. Residents in the comments continued to complain about the wallet’s unreliability.