El Salvador’s plan to accept Bitcoin (BTC/USD) as legal cash has been criticized by Andrew Bailey, Governor of the Bank of England (BoE). This was revealed in a report on November 25, quoting the Governor of the Bank of England, who said after making an appearance at the Cambridge University student union the day before. Bailey said in his address that the country’s choice exposes individuals to the volatility of Bitcoin:
It concerns me that a country would choose it as its national currency. What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have.
According to Bailey, the International Monetary Fund (IMF) is also unhappy with El Salvador’s choice. He was referring to the International Monetary Fund’s refusal to support the Central American BTC move.
The IMF noted macroeconomic, financial, and legal concerns at the time. The IMF restated its view two months later, claiming that El Salvador’s decision to accept BTC is an unwise shortcut.
While Bailey acknowledged that digital currencies have a compelling use case, he also said that the Bank of England considered stability a critical aspect, particularly if the digital currency is to be used for payments. Digital currencies, he claims, are not stable.
Bukele’s government is still pushing through with its contentious BTC plan
Despite locals rushing to the streets to oppose the plan, El Salvador adopted BTC as legal cash alongside the US dollar on September 7. Since then, the Salvadoran government has made a concerted attempt to acquire more BTC. The nation currently owns 1,120 bitcoins, with the most recent purchase being in October.
The government also established gasoline discounts for Salvadorans who paid using the government-backed Chivo wallet, thus excluding those who refused to pay in Bitcoin. Citizens complained that the government was attempting to force BTC down their throats. Onor vador, on the other hand, has declared intentions to establish a Bitcoin city at the foot of the Conchagua stratovolcano.
According to reports, El Salvador’s anti-BTC stance derives from a lack of openness. For example, it’s unclear who controls the country’s Bitcoin wallet’s private keys. The government has also yet to develop a clear policy governing when and how much it buys BTC.
While crypto fans see the nation’s embrace of Bitcoin as a positive step, detractors argue that President Bukele’s authoritarian background contradicts Bitcoin’s values. The wrongful arrest of Bitcoin opponent Mario Gomez is one example.