El Salvador's decision to become the world's first country to declare Bitcoin legal tender isn't improving the cryptocurrency's value.
Is bitcoin beneficial to El Salvador?
Bitcoin Is Now Accepted as Legal Tender Bitcoin supporters
in El Salvador, including President Nayib Bukele, believe the policy that went
into force on Tuesday was historic. However, the launch was hampered by
technical issues and significant political resistance.
Bitcoin was down 11% in mid-morning trade Tuesday, continuing its steep drop from Monday evening. According to CoinDesk, the price of Bitcoin has dropped from more than $52,000 to less than $46,000. It dropped below $43,351 at one time.
Since El Salvador enacted the bill opening the way for the move on June 9, the market appears to have already priced in all of the potential of the digital currency gaining legal tender status. Some investors may be selling after the country purchased 400 Bitcoins on Tuesday to preload government-run Bitcoin wallets for residents known as Chivo.
However, the deployment has not been without hiccups. El Salvador's government had previously unplugged the Chivo wallet to address technical issues. Officials stated that they are conducting testing in order to make it accessible for download later in the day.
Businesses in El Salvador are forced to accept Bitcoin for products and services as of 3:00 p.m. ET today, with the exception of those experiencing technological challenges. Throughout the country, Bitcoin ATMs have been deployed.
The law places Bitcoin on the world stage in a new light, providing the cryptocurrency the credibility that some supporters have been hoping for for years. However, it is not without its detractors. In June, the International Monetary Fund stated that the move presents a number of concerns, ranging from financial to legal. JPMorgan also stated that the decision might have a negative impact on the country's economy.
El Salvador's infrastructure has also raised concerns about the law's long-term implications. The country's Internet and smartphone access is not on par with that of many other nations, which may hinder Bitcoin's adoption.
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