Bank of England Criticizes El Salvador over Bitcoin
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Bank of England Criticizes El Salvador over Bitcoin

5 months ago

Governor Andrew Bailey said: "What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have?"

Bank of England Criticizes El Salvador over Bitcoin

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The governor of the Bank of England has criticized El Salvador's decision to adopt Bitcoin as legal tender.

Speaking at Cambridge University's student union, Andrew Bailey said: 

"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 Bloomberg, Bailey also warned that the International Monetary Fund is far from impressed with President Nayib Bukele.

It comes as the Bank of England continues to explore central bank digital currencies. Bailey has issued repeated warnings about Bitcoin — telling those who buy into this digital asset that they should be prepared to lose all of their money. During the Cambridge event, he added:

"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."

Other Bank of England officials have claimed that, if cryptocurrencies continue to be integrated into legacy financial systems, they could contribute to the next financial collapse — causing a reprise of the subprime mortgage crisis that rocked global markets in 2008.

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El Salvador Shrugs Off Concerns

President Bukele's bold move to elevate Bitcoin to the same status as the U.S. dollar has paid off… at least for now.

The world's biggest cryptocurrency is currently trading at about $59,000 — markedly above the price of $52,000 seen on the country's "Bitcoin Day" on Sept. 7.

El Salvador has invested heavily in Bitcoin — repeatedly buying the dips in recent months. Profits are being spent on building new schools and a hospital for pets.

The Central American country also wrapped up a weeklong conference devoted to BTC in recent days — and on the final night, Bukele revealed plans to build "Bitcoin City" next to a volcano. 

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