El Salvador is attempting to increase usage of its government-issued Chivo Bitcoin wallet by offering $0.20 per gallon discounts on petrol purchases to consumers who pay using Bitcoin.
Salvadoran President Nayib Bukele announced a $0.20 per gallon cut in petrol costs for local residents who pay with the state Bitcoin wallet Chivo. The president announced the subsidy through Twitter on Sept. 30, describing it as “good news for Salvadorans’ pockets.” Bukele stated, according to a rough translation:
“The state-owned business Chivo has reached an agreement with the country’s largest gas station operators that, beginning tomorrow, their stations will sell each gallon of petrol for $0.20 less using the Chivo wallet.”
Bukele highlighted that the discount is not time-limited and that it is available to any local resident or business. He noted that the reduction will cancel out “several increases in the worldwide price of petroleum” and “lower supply chain transportation costs.”
However, some Salvadorans appear to be skeptical that the subsidies will eventually benefit the public, as a Twitter user, Adan 3840 stated:
“Those 20 cents will come from all of us, right? The gas station does not lose, there goes the refund after paid with the taxes of even those who walk on foot.”
Others expressed skepticism over the government’s choice to offer the discount solely to those who pay with Chivo, with another Twitter account querying why the administration did not act earlier to reduce fuel prices.
Along with the news, Bukele announced the establishment of a fund to “stabilize” the local price of liquified gas. While the international market anticipated a $1.17 increase in the price of 25-pound cylinders of liquified gas, the president maintained that Salvadorans will see a “slight decrease” in cost.
He said that the government will absorb the rise for one year only, stressing that any decreases in global gas prices during that time period will also be passed on to consumers.
On Sept. 7, El Salvador became the first government to adopt Bitcoin as legal cash. Later that month, Bukele stated that less than three weeks after Chivo’s launch, one-third of Salvadorans were already utilizing it.
On the other hand, observers have expressed doubt about Bukele’s claims of rising crypto usage, with renowned crypto opponent and author David Gerard saying that Salvadoran officials are “feeding Bukele data that satisfy him” but “break apart under the most cursory investigation.”
Gerard concluded in his Attack of the 50 Foot Blockchain newsletter that if the President’s data is right, the government-backed wallet “would be processing more transactions per day than Visa does globally.”
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