The chief of the Bank of England shared his point of view on the Bitcoin law of El Salvador as an experiment with Bitcoin adoption.
On 7 September, El Salvador adopted Bitcoin as a legal tender. However, it was a historical decision of EL Salvador president Nayib Bukele but many people and authorities criticized El Salvador’s president for this decision. Recently the Bank of England chief raised problems with this adoption.
Andrew Bailey, Bank of England Chief, shared his point of view on El Salvador’s Bitcoin adoption and experiment speaking to the Cambridge University students union on Thursday of this week.
According to Bailey, adopting two currencies for a country is not a good thing but adding volatility in the currency is a big issue because it will impact much.
Recently, Nayib Bukele announced the Bitcoin City plan of El Salvador to collect funding from the citizens to invest in the Bitcoin mining operations and create new options with Bitcoin-Bond to generate revenue for the citizens.
According to Bailey, this move to El Salvador is an experiment. He said that Bitcoin has volatility issues with the use case and it is going to be a big issue for the citizens of El Salvador.
“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.”
Bailey hinted that there can be use cases with the technology at which crypto is lying but with a stable value without any volatility.
El Salvador against criticism
In the past, the IMF and World Bank raised their concern on El Salvador to adopt Bitcoin as currency but no one official of El Salvador responded against the criticism.
However recently El Salvador Ambassador Milena said that Washington DC has concerns over Bitcoin adoption because they don’t want to lose power.