Bitcoin has become an official currency in El Salvador, and cryptocurrency markets and platforms seem to be struggling with it, as the price of the world’s largest cryptocurrency dropped from around $52,000 to below $43,000. According for Coinbase.
The drop occurred on the day El Salvador prepared to adopt the largest cryptocurrency by market value as legal tender, becoming the first country to do so.
The currency fell by as much as 16 percent. Ethereum fell 12% to $3,441. Cryptocurrency shares MicroStrategy and Coinbase also lost about 9 and 4 percent, respectively.
In a Twitter update, Coinbase said Coinbase users were experiencing late or canceled transactions at high prices in the morning. But these issues were resolved by the afternoon.
Major cryptocurrency platforms Kraken and Gemini have also been investigating delays and performance issues.
The president of El Salvador announced in a tweet that Chivo, the government-run Bitcoin wallet, is temporarily disabled. This is to increase the capacity of the servers, which was hindering new users from installing them.
When the move was first announced, it didn’t have as much of an impact on the price as some had expected. This is because the announcement was short on detail and people were on the fence about how to implement it.
A large part of El Salvador lives in poverty and does not have the internet or smartphone connection required to participate in the Bitcoin network.
Transaction fees, processing times, and other hurdles also make this seem like a beta test rather than a solution to many of the problems plaguing the country’s poor.
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Bitcoin drops with adoption in El Salvador as a currency
As part of the new law, businesses are required to accept bitcoin for goods and services. This is despite the fact that merchants who are technically unable to accept it are exempted.
The government has installed 200 digital currency ATMs around El Salvador. She also bought 400 bitcoins worth about $20 million, and Chivo wallets give $30 worth of bitcoins to Salvadorans who sign up.
Bitcoin proponents have long made a strong case for Latin American markets using cryptocurrency as a medium of exchange and remittances, and even for central banks experiencing significant currency depreciation.
A Panamanian politician introduced the Crypto Law, which seeks to make Panama compliant with blockchain, crypto assets, and the Internet.
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