Andrew Bailey, the Governor of the Bank of England, expressed his concerns about the use of Bitcoin as legal tender in El Salvador. Speaking at an event organized by the Cambridge Student Union, Bailey said that the volatile nature of Bitcoin is dangerous.
“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,” the BOE Governor said.
El Salvador approved the use of Bitcoin as legal tender in the country during September 2021. In addition to the usage of the digital asset as a payment method, the Central American nation is also holding BTC in large amounts.
During the latest crypto market correction, El Salvador expanded its BTC holdings with the addition of 100 Bitcoin. With that, the country is now holding more than $60 million worth of Bitcoin . Since the start of October, El Salvador has increased its BTC accumulation. Moreover, the country introduced several initiatives to enhance BTC’s mass adoption in the region.
Nayib Bukele’s Bitcoin Strategy
Nayib Bukele, the President of El Salvador, received criticism from leading financial organizations for the country’s Bitcoin strategy. Last week, IMF criticized El Salvador’s BTC adoption. “Given bitcoin’s high price volatility, its use as a legal tender entails significant risk to consumer protection, financial integrity and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, bitcoin should not be used as a legal tender,” IMF said.
However, Bukele remained a strong believer in Bitcoin despite all the criticism. In fact, he expressed his desire to acquire more BTC in the future. “Bank of England is ‘worried’ about El Salvador’s adoption of BTC? Really? I guess the Bank of England’s interest in the well-being of our people is genuine. I’m really concerned about the Bank of England printing money out of thin air,” Bukele said.
