The Financial Times argues that it's hard to see El Salvador's experiment ending well.
With El Salvador making history by accepting Bitcoin as legal tender, there’s increasing speculation that other countries — especially those based in Latin America — could follow suit.
However, other nations are explicitly ruling out the prospect that BTC could equal status to their national currency.
One of them is Russia, which has said embracing BTC as legal tender would be detrimental to the country’s economy.
Indeed, this also chimes with the warnings that were given to El Salvador by the International Monetary Fund.
Back in July, the organization warned that the country’s central bank would lose control of monetary policy and the freedom to set interest rates. It also claimed that the value of goods and services in the country could become unstable, with prices fluctuating “massively.”
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A Dangerous Gamble?
Across mainstream media outlets today, coverage has been cautious to stay the least. The BBC has described “fear and excitement” surrounding Bitcoin Day, while the Financial Times went further — calling it a “dangerous gamble.”
The newspaper’s editorial board described El Salvador’s move as “odd” given the low inflation and economic stability it has benefitted from since adopting the U.S. dollar 20 years ago.
Warning that it’s hard to see how this experiment could end well — and that ordinary consumers may end up paying a heavy price for the president’s gamble — the article added:
“Financial inclusion, an oft-touted bitcoin benefit, is surely better served by encouraging fintech neobanks. Their proliferation across Latin America is helping the unbanked access financial services and cutting the cost of money transfers, without any of the risks — or the pollution — generated by cryptocurrency.”
