• El Salvador has became the first country in the world to adopt bitcoin as legal tender, adding it as an option in the country alongside the US dollar.

SAN SALVADOR, RAW – El Salvador has became the first country to adopt bitcoin as legal tender, although it suffered teething problems when the government had to unplug a digital wallet to cope with demand.

President Nayib Bukele, who pushed for adoption of the cryptocurrency, called for help from users who had already downloaded the government-backed app, to test if it was now working properly.

“Could you please try to register and post in the comments if there are any errors or if the whole process works fine?” the president wrote on Twitter.

Bukele said using bitcoin will help Salvadorans save $US400 million ($A541 million) a year on commissions for remittances while giving access to financial services to those with no bank account.

Carlos Garcia, who went to a booth giving out advice on the new currency at a shopping mall on Tuesday to learn about how transactions would work, was excited about the opportunities bitcoin could provide.

“El Salvador is taking a great step forward today,” he said.

However, the poorest may struggle to access the technology needed to make bitcoin work in El Salvador, where nearly half the population has no internet and many more only have sporadic access.

“I’m going to continue suffering with or without bitcoin,” said sweet-seller Jose Herrera, who said he had trouble accessing a mobile phone.

Others say the move may fuel money laundering and financial instability.

It has already muddied the outlook for more than $US1 billion in financing that El Salvador is seeking from the International Monetary Fund (IMF).

Bukele, 40, is Latin America’s most popular leader but has been accused of eroding democracy, not least by the administration of US President Joe Biden.

Last week, top judges appointed by his lawmakers ruled that he could serve a second term.

Earlier on Tuesday, Salvadorans trying to download the Chivo digital wallet, which the government has promoted, promising $A41 of bitcoin for each user, found it was unavailable on popular app stores.

Then Bukele tweeted that the government had temporarily unplugged it, in order to connect more servers to deal with demand.

Bukele blamed Apple Inc, Google and Huawei’s app download platforms for the delay.

“Release him! @Apple @Google and @Huawei,” Bukele wrote in one of his tweets, which was accompanied by a red-faced “angry” emoji.

The wallet was later available from Huawei.

Google and Apple did not immediately respond to requests for comment.

Polls indicate Salvadorans are wary of the volatility of the cryptocurrency, which can shed hundreds of US dollars in value in a day.

Ahead of the launch, El Salvador bought 400 bitcoins worth about $US20 million, Bukele said, helping drive the price of the currency above $US52,000 for the first time since May.

Hours later, however, bitcoin had weakened and last traded down 8.84 per cent at $US47,327.32.

Ethereum, another crypto currency, fell 10.52 per cent to $US3,537.62, while crypto exchange Coinbase Global slid 3.96 per cent after reporting delays in some transactions on its platform.

The change means businesses should accept payment in bitcoin alongside the US dollar, which has been El Salvador’s official currency since 2001 and will remain legal tender.

It remains unclear whether businesses will be penalised if they do not accept bitcoin.

In the run-up to the launch, the government installed ATMs that allow bitcoin to be converted into US dollars and withdrawn without commission from the digital wallet, called Chivo.

“Like all innovations, El Salvador’s bitcoin process has a learning curve,” Bukele tweeted.

“Not everything will be achieved in a day, or in a month.”

Bukele added: “We must break the paradigms of the past. El Salvador has the right to advance towards the first world.”