- The governor of the Bank of England, El Salvador’s central bank, expressed concerns about the adoption of bitcoin as a national currency.
- During a speech at the Cambridge University student union, Bank of England (BOE) Governor Andrew Bailey expressed concerns about bitcoin being used as legal tender in El Salvador.
- Bailey further explained “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.”
- El Salvador bought 100 more bitcoins despite the IMF’s warning following reports of a new version of Covid-19. El Salvador’s president responded via Twitter Saturday to the concerns raised by the governor of the Bank of England.
The governor of the Bank of England, El Salvador’s central bank, expressed concerns about the adoption of bitcoin as a national currency. During a speech at the Cambridge University student union, Bank of England (BOE) Governor Andrew Bailey expressed concerns about bitcoin being used as legal tender in El Salvador. Bailey further explained, “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.”
Bitcoin became legal tender alongside the dollar in September when El Salvador passed a bitcoin law. Governor Bailey said that El Salvador’s decision to legalize BTC has angered the International Monetary Fund (IMF). For the first time, El Salvador has adopted bitcoin as legal tender alongside the U.S. dollar that it has used for two decades. The law took effect in September. According to President Nayib Bukele, El Salvador has purchased 1,120 bitcoins.
According to the IMF, the use of bitcoin as a currency will have significant adverse effects on consumer protection, financial stability, and financial integrity. Aside from this, “its use will lead to fiscal contingent liabilities.” The IMF’s warning comes on the heels of El Salvador’s president announcing plans to build a “Bitcoin City” powered by a volcano and financed by bitcoin bonds.
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El Salvador bought 100 more bitcoins despite the IMF’s warning following reports of a new version of Covid-19. The governor also discussed whether the Bank of England should issue its own central bank digital currency (CBDC). Bailey further emphasized “There is a strong case for digital currencies, but in our view, it has to be stable, particularly if it’s being used for payments. That is not true for crypto assets.”
El Salvador’s president responded via Twitter Saturday to the concerns raised by the governor of the Bank of England. He tweeted “Bank of England is ‘worried’ about El Salvador’s adoption of bitcoin? Really? I guess Bank of England’s interest in the well-being of our people is genuine. Right? I mean, they have always cared about our people. Always. Gotta love Bank of England.”
