If you're paying for some chicken wings, then you're clearly not actually paying with bitcoin as the transaction fee would cost more than your dinner.

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.