Most bitcoin companies in El Salvador softly disappear from the market

The Great Bet of El Salvador in Bitcoin hit a power: almost all crypto companies that registered actually do not play rules.

Almost 90% bitcoin (Btc) Service providers registered in El Salvador do not work, in accordance with recent report Author: El Mundo, which stated data from the Central Spare Bank, which shows that since 181 companies are officially registered to offer Services Bitcoin in the country, 161 is marked as “non-working”.

It is about 89% of the total number. Only 20 companies are still active. They include Chivo Wallet that supports the government, among other things.

El Mundo adds that at least 22 inactive providers may fail to meet the regulatory standards in Article 4 of the Law on Bitcoin, which required the crypto company to work with “high standards of integrity and honesty”. Providers should have anti-money laundering programs, clear records of assets and obligations and cyber cursing systems adapted to the nature of services offered.

It is unclear how much others lags in line or is undergoing execution.

Breaking the paradigm of the past

The numbers take a picture of the Starge image of the current situation Bitcoin in El Salvador. Return 2021. year, the country became the first in the world to make Bitcoin legal offer. It was a move that drew global titles and crypto industry praise, but also concerns than traditional financial institutions. President Naiib Bukela, Samopised “Ce El Salvador” overturn In order for the policy to attract technological investments, lower remittance costs and bring banking services in non-banking.

The law made the Bitcoin Legal Tender along with the US dollar. It is also necessary for all companies to accept that as a payment, unless they are missing funds for that. The government even launched its own digital wallet, Chivo and submitted a $ 30 bonus in BTC citizens who have signed up.

Still, things didn’t go smoothly. The Inbida faced technical issues, adoption was limited and a year later, studies propose If most salvadorans stopped entirely to stop using it.

In CRIPTO.NEVS, HON NG, CRPTOCURRENCE CRPTOCURRENCE CRIPTCURRENCE CRIPTOCRENCE, which also provided The Cripto license in El Salvador, agreed with data from El Mundo, saying that “emphasizes some significant challenges in the passage of Bitcoin law.”

“With over 88% of Bitcoin companies, it is still operational, there is evident that there are infrastructure and institutional obstacles to addressing” Cripto Hub Vision to become “Cripto Hub”, may be required further regulatory development. “

Hon Ng

IMF opposition

By 2022. Law Bitcoin became the main point for sticking in negotiations with the International Monetary Fund – essential financial Bakar for El Salvador – as in the country demand Agreement of $ 1.3 billion. The IMF in turn did not make a secret concern for politics.

He warned the risks for financial stability, consumer protection and the total fiscal health of the country. In a public statement, IMF It is recommended If El Salvador “sued the scope of law Bitcoin by removing Bitcoin Status for the legal position.”

The administration of the Bukela has resisted for a while. But in the end, the Legislative Assembly of the country entered silent, but significant changes. The state was no longer needed to get involved in Bitcoin transactions. Companies no longer asked to accept BTC. In effect, Bitcoin stopped applied as a legal tender, although the government did not say that in so many words.

However, the government did not fully give up Bitcoin. Quite the opposite. President of Bukela has continued In order to publicly publish the purchase of Bitcoin and says the country now has more than 6,100 coins – valued to over $ 500 million. He recently claimed that the portfolio was in green. But the exact source of funding remains blurry. Critics are worried that the state can still use public purchase funds, something that the IMF allegedly asked to avoid Salvador to avoid.

Questions to answer

Now, with most registered suppliers Bitcoin inactive, it is unclear how much cryptucta infrastructure in the country remains functional. The registry data does not explain why many companies left silently.

Bitget’s Hon Ng said Cripto.news to make a small low active supplier rate could be a “combination of several factors, with a significant issue is a gap between the legal framework and the actual business environment in El Salvador.”

“Although the law Bitcoin should be progressive, some aspects cannot fully appreciate the country and providers of medium-sized financial services.”

Hon Ng

Ng went further to notice that the Bitcoin Mandate’s law to establish customized programs, adding many couples of companies, especially small medium-sized firms, “lacks funds to meet these standards, especially with current non-user demand.”

“It is combined with regulatory ambiguities and limited basic adoption, it can lead to situations in which companies initially deal with optimism, but later become inactive because they encounter practical challenges.”

Hon Ng

The Government Office Bitcoin continues to promote the online initiative, and there are still plans – at least officials – for so-called volcano bonds, and a tokenized link supported by Bitcoin that supports the support of Stablecoin issuer. But those plans are delayed several times. And outside Chivoys and several private platforms, there are few signs of living ecosystems.

The story of Bitcoin El Salvador may not be over. But for almost three years, only 20 providers continue to run and many others who received from regulatory standards, a large crippto experiment in the country seems much smaller than once did it.