BoE Chief Express Concern Over El Salvador’s Bitcoin Adoption
According to Bloomberg, Bank of England Governor Andrew Bailey on November 25 labeled El Salvador’s move to use Bitcoin as its currency “concerning,” adding that consumers “would almost certainly be caught up in the volatility.”
“The fact that a country would pick it as its official currency is concerning to me. What concerns me the most is whether the residents of El Salvador are aware of the nature and volatility of the currency in which they live,” he said in response to questions from students at Cambridge University’s students union in response to questions.
Bailey went on to say that the International Monetary Fund (IMF) was likewise dissatisfied with El Salvador’s performance. The International Monetary Fund (IMF) keeps track on hazards to global financial markets. According to him, the BOE was also considering whether to develop its own digital currency system in order to promote seamless online payments and provide clients with a safe and technologically up-to-date method of storing cash.
“Digital currencies have a compelling argument to be made, but in our opinion, they must be stable, especially if they are to be utilized for payment purposes. This is not true in the case of crypto assets,” Bailey said.
El Salvador became the first country to formally recognize Bitcoin as legal cash in September 2021, becoming the first country to do so. The administration of President Nayib Bukele believes that this would provide many Salvadorans with access to banking services for the first time and that it will save around $400 million in fees on remittances sent home from abroad each year.
El Salvador’s parliament enacted a measure in June that would enable cryptocurrency money to be recognized as legal cash for all products and services in the tiny Central American country, alongside the US dollar, in the future. AFP said that opinion surveys suggest that a majority of El Salvador’s 6.5 million people oppose the notion and will continue to use the US dollar, which has been the country’s official currency for the last 20 years.
Economists and international organizations, including the World Bank, the International Monetary Fund, and the Inter-American Development Bank, have raised worry over El Salvador’s adoption of Bitcoin. Cryptocurrencies have exploded in popularity over the past several years, despite the fact that there is a heated discussion over whether or not they should be legal tender.
In India, which has an estimated twenty million cryptocurrency investors, lawmakers are looking forward to the winter session of Parliament, during which a cryptocurrency bill will be introduced, which would clarify the government’s position on digital currencies. Starting on November 29th, the winter session will be held.