El Salvador’s government has launched an initiative to promote its Chivo Bitcoin (BTC) wallet. This allows citizens and businesses to use the app to purchase fuel at a reduced rate as global prices rise.
President Nayib Bukele announced the Chivo operators had reached a deal with two fuel distribution firms, meaning that Chivo customers could get a discount of USD 0.20 per gallon at petrol stations throughout the country.
Bukele stated that Chivo, a state-owned company, had “negotiated” with the largest gas station operators in the country and that this move would “mitigate many increases in international fuel prices.”
He explained that the discount would not be limited and would be available to all individuals as well as public transport operators and “entrepreneurs and companies.”
Diario El Salvador , the government mouthpiece, reported that taxi drivers, Uber, and InDriverdrivers as well as public transport, school transport operators and private motorcyclists, private vehicle delivery people, travellers and merchandise distributors all stood to gain.
The President stated that the move would also reduce transportation costs in supply chain supply chains.
All over the globe, fuel prices are rising and there have been reports of shortages in recent days. These disruptions have affected countries as far as Brazil and the UK. Bloomberg data shows that Brent crude oil prices are at an all-time high, while natural gas prices have risen.
ElSalvador.com reported the international picture “will drive up gasoline and diesel prices in the country” and pointed out that there have been “at least 15 increases in fuel costs and only three decreases this year.”
Mainstream media outlets report that many people in the country are still having difficulty accepting bitcoin adoption, even though the token was legal tender on September 7.
Reuters quoted Jean Paul Lam, an associate professor at Canada’s University of Waterloo as stating:
“Bitcoin is difficult to adopt […], especially for elderly people who want to send remittances. It will have to overcome many obstacles before people adopt it.
Lam acknowledged that there are other countries that are likely to be watching the Central American nation’s events, and called Bukele’s BTC plans “little laboratory experiment that other countries are looking at.”