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| Bitcoin drops with adoption in El Salvador as a currency |
According to Coinbase data, Bitcoin has become the official currency of El Salvador. The cryptocurrency market and platforms seem to be struggling with this. The price of the world's largest cryptocurrency has fallen from around $52,000 to less than $43,000.
The drop came as El Salvador became the first country to prepare to adopt the cryptocurrency with the largest market capitalization as legal tender.
The coin lost 16%. Ethereum stock fell 12% to $3,441. Cryptocurrency shares MicroStrategy and Coinbase are also down about 9% and 4%, respectively.
In a Twitter update, Coinbase said Coinbase users experienced delays or high price cancellations in the morning. But these problems were resolved in the afternoon.
Major cryptocurrency platforms Kraken and Gemini are also investigating latency and performance issues.
The President of El Salvador announced in a tweet that a Bitcoin wallet operated by the Chivo government has been temporarily banned. This is to increase server capacity, which will prevent new users from installing it.
When the move was first announced, its price impact wasn't as big as some had expected. This is because advertising lacks detail and because people have a wait-and-see attitude when it comes to implementation.
Most regions of El Salvador live in poverty and do not have an internet connection or a smartphone necessary to participate in the Bitcoin network.
Transaction fees, processing times, and other hurdles also make this appear more like a test run than a solution to the many problems facing the country's poor.
Bitcoin drops with adoption in El Salvador as a currency
Under the new law, businesses must accept Bitcoin as goods and services. Despite the fact that traders who cannot technically accept this are exempt.
The government has installed 200 digital currency ATMs in El Salvador. It also bought $20 million worth of bitcoins, and Chivo Wallet provided $30 worth of bitcoins to registered Salvadorans.
Bitcoin proponents have long been giving strong reasons to the Latin American market to use cryptocurrencies as a medium of exchange and transfer, and even to central banks that have experienced a massive devaluation of the coins.
A Panamanian politician introduced the Crypto Law, which aims to make Panama compatible with blockchain, crypto assets, and the Internet.