El Salvador Partners With Crypto Wallet Provider AlphaPoint to Address Chivo Concerns

El Salvador has relaunched its Chivo crypto wallet in an apparent bid to fix a series of problems within the state-run Bitcoin wallet, including blocked accounts, unauthorised charges, and failed transactions. The Chivo wallet has faced technical issues since its roll-out in September 2021 when the country became the first nation in the world to declare Bitcoin as legal tender, and the government has now confirmed that it had roped in US-based company AlphaPoint to help provide a better tech infrastructure for the wallet going forward.

As per a press release, crypto software firm AlphaPoint will support the frontend and backend infrastructure that powers the Chivo crypto wallet and facilitate the integration of the entire ecosystem including the mobile application, mobile point-of-sale (PoS) processing, merchant website support, call-centre support software, and the administrative console.

AlphaPoint, a company that's been around globally since 2013, has been focused on areas such as wallet stability and uptime, and scalability, while integrating user verification services that use machine-learning facial recognition and other authentication tools. The company claims to have also improved on Lightning integration for wallets to enable near-instantaneous low-fee Bitcoin transactions via QR and Lightning addresses.

"The Government of President Nayib Bukele informs that the American company AlphaPoint is providing technology for Chivo Wallet, the first national digital wallet in the world. AlphaPoint, which provides financial technology to institutions globally, is adding its expertise to offer financial services and access to Bitcoin for millions of Salvadorans who are actively using the Chivo wallet," says a statement issued by the El Salvador government.

The government has also reportedly terminated its contract with Athena Bitcoin, which previously provided the technology infrastructure for the Chivo wallet.

Despite the technological hitches the country's president, Nayib Bukele continues to claim that the Chivo wallet is popular amongst El Salvador citizens. In a recent tweet he claimed that the government issued Bitcoin wallet already has 4 million users, which is a significant feat for a country with a population of just 6.5 million.

The announcement also arrives days after the government of El Salvador rejected a recommendation by the International Monetary Fund to drop Bitcoin as legal tender in the Central American country. Treasury Minister Alejandro Zelaya angrily said that “no international organisation is going to make us do anything, anything at all."

The IMF recommended last week that El Salvador dissolve the $150 million (roughly Rs. 1,120 crore) trust fund it created when it made the cryptocurrency legal tender and return any of those unused funds to its treasury. The agency cited concerns about the volatility of Bitcoin prices and the possibility of criminals using cryptocurrency for various activities.