Also El Salvadorians can use any app/wallet they want to transact over Bitcoin/LN. However, the government provides incentives to use Chivo. If the government is too exploitative people will move away from Chivo.
Is there any guaranty that the database in Chivo is 100% backed by BTC?
If you are a merchant you can accept BTC via lightning but settle in USD if you wish.
Transactions costs are around $0.0005.
Chivo is compatible with the lightning network, but Chivo to Chivo transactions are just centralized database updates.
That's still really great, because people are perfectly free to use any other LN app (both custodied and self-custodied options available) to interact with Chivo users if they don't trust the El Salvador government app.
This open network is why Bitcoin + Lightning will win.
From the sound of it the "Chivo app" is what you have to use - so government must be banking bitcoin and then issuing "Chivo-money" that's actually exchanged, backed by the bitcoin reserve.
Bit like the old 'gold standard'. What's interesting though, is that the transfers are going to be asymmetric - bitcoins being sent in as remittance, then traded internally as Chivo-coins. I guess there has to be a mechanism to allow conversion back to BTC (and then maybe dollars) to import goods - but the circulating Chivo-coin is value that's been conjured out of thin air (as long as there's confidence it's still backed up with BTC).
All quite fascinating - either a stroke of genius, or a disaster in the making.