El Salvador accepts cryptocurrency bitcoin as a legal tender. After accepting bitcoins as a legal tender by this country, several global agencies expressed their concerns. Also, some of the residents of different countries say that it is not the right action by the President of El Salvador. Recently, the Bank of England Governor named Andrew Bailey stated that accepting cryptocurrency bitcoin will threaten the economy. Also, it is not the right action because bitcoin is very volatile for any country to accept it as a legal tender. Therefore, its acceptance as a financial currency of the country will create a lot of disparity and volatility in the financial system, which is not suitable for the growth of the nation.
The government body stated on November 25 after El Salvador accepted bitcoin as a legal tender. He says that it is very concerning to see that the presidents of different nations are looking at bitcoin as an excellent opportunity to boost their economy. However, due to the high degree of volatility of the bitcoin prices in the market, the economy will never be stable for the country that accepts it as a legal tender.
He also expressed his concerns regarding the matter by saying that soon, the company has to accept it as a medium of exchange daily. Therefore, it is a matter of worry for him, and due to the price volatility in the market, people will not be able to decide the correct value of a commodity or the currency. He also quoted the statement given earlier by the IMF, which was also not happy with the decision of El Salvador.
In a statement earlier, he also said that the bank of England was also into cryptocurrency a little while earlier. The bank was looking forward to creating its cryptocurrency so that the online transactions could smoothly work with the currency that does not have any physical existence and conversion, faster online transactions within seconds.
But, the cryptocurrency designed by the bank of a country is different from the private one. Bailey added that the crypto assets we can find in the market are highly volatile, and no one can regulate them. Therefore, it will not be the right thing to adopt as legal tender unless and until it is brought under rules and regulations by different nations’ governments.
El Salvador’s take!
In favour of accepting bitcoin as a legal tender, the President of El Salvador stated that it would provide banking access to thousands of people in the nation. Also, it will save money, around $400 million consumed in fees that people have to incur on making daily transactions, according to the details of the bitcoin-code.live.
The President of El Salvador also added that bitcoins would facilitate the economy’s growth and contribute to the growth of the global ecosystem. He officially declared bitcoin as a legal tender in September 2021 after discussions with the board of members and the financial authorities of the country. In June, he made a statement that you can purchase goods and services inside the geographical boundaries of the country and the United States dollar. It is something that was initiated further in September 2021 by accepting bitcoin as a legal tender.
According to the research done recently by AFP, most of the population of El Salvador is not happy with the government’s decision. They also prefer carrying on United States dollars to make purchases every day and across its geographical boundaries. The people who do not favor accepting bitcoin as legal tender or 6.5 million in number think that the United States dollar is the best global currency that you should use.
Apart from the bank of England, other economists and international bodies are concerned about El Salvador’s decision to accept bitcoin as a legal tender inside the country. The parties included in this are the World Bank, the IMF, and the inter-American development bank. On the contrary, in some countries, the government is looking forward to imposing strict rules and regulations on the use of cryptocurrencies like bitcoin. They want to regulate cryptocurrencies because the Blockchain, the base of bitcoin use, can facilitate faster and safer transactions.