Cryptocurrency exchange Bitso and digital payments company Flexa have announced their partnership with El Salvador’s government to work on the government-owned Bitcoin wallet ‘Chivo’.
El Salvador on Tuesday enforced the Bitcoin Act along with launching its Bitcoin wallet Chivo. To promote the usage of Bitcoin, $30 worth of Bitcoin would be added to every user who downloads the ‘Chivo’ wallet on their phone.
Various stores such as Mcdonald’s and Starbucks have already started accepting payments in Bitcoin as per the new law.
Regarding the partnerships, the Latin American crypto exchange Bitso will be the core service provider for Chivo and work with Silvergate Bank, a US federally regulated and California state-chartered bank, to facilitate transactions in US dollars.
Santiago Alvarado, vice-president of Bitso, said:
“We are looking forward to working with El Salvador in an initiative that will transform payment structures and increase financial inclusion in the country.”
However, the Chivo wallet was temporarily suspended on the first day after the servers failed to deal with the demand. President Bukele blamed app download platforms for the delay.
On the other hand, Cryptocurrency payments provider Flexa has begun offering Lightning Network payments to some partners and merchants in El Salvador. Its services will expand to all Flexa merchants in the coming weeks, the company said on Tuesday.
The lightning network is an off-chain technology that uses layer 2 to aggregate bitcoin payments and settle them instantly. The transactions are added to the Bitcoin blockchain, leading to faster transactions and lower fees.
Flexa will offer Lightning Network payments to desired merchants in El Salvador to set up the Bitcoin payments system in a compliant way. According to the official announcement, merchants will be able to receive Bitcoins in a legally compliant and secure way on a platform called “Pay with Flexa.”
Tyler Spalding, CEO of Flexa, said in a statement:
“We’re delighted to begin accepting Lightning payments network-wide, and we look forward to enabling merchants to receive payments through additional Layer 2 scaling solutions and native blockchains in the near future.”
Apart from Bitso and Flexa, various other companies have joined the initiative. Athena Bitcoin will be responsible for some of the front-end services and Chivo’s ATM-related operations whereas Algorithm will be the official blockchain provider.