The Governor of the Bank of England is Concerned About Bitcoin Adoption in El Salvador
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A pedestrian crosses a road near the Bank of England in London, U.K., on Thursday, May 6, 2021. The U.K.’s economic rebound from the pandemic is already fueling speculation that Bank of England policy makers this week will start discussing how and when they can ease their foot off the stimulus pedal. Photographer: Jason Alden/Bloomberg
Everyone around the world already knows that Bitcoin has been made legal tender in El Salvador. This happened a few months ago and so far, the authorities are reporting solid results. Of course, changes won’t happen overnight. The real results will be shown after a year or more of use. However, when a smaller country starts concerning the bigs in any aspect, it’s clear that it’s doing something right.
Many countries and the IMF have been very concerned about the legal Bitcoin adoption in El Salvador, and now England is joining the list. Governor Andrew Bailey has expressed personal concern about El Salvador’s move, citing the volatility as the reason behind it.
The IMF is Not Happy
While speaking at a Cambridge University student union event last week, the Governor of the Bank of England expressed serious concern about El Salvador’s legal Bitcoin adoption. He said that he’s concerned about a nation using Bitcoin or cryptocurrencies as a national currency. Bailey believes that it’s a wrong move, and also reiterated the Bank of England’s and IMF’s stance that no other country should follow in El Salvador’s footsteps.
His speech comes not long after the IMF warned countries around the world not to use Bitcoin as legal tender. Citing its high volatility, the International Monetary Fund said in a statement that using Bitcoin as legal tender poses significant risks for financial integrity and consumer protection.
A few weeks ago, El Salvador’s president Nayib Bukele announced plans for the world’s first “Bitcoin city”. It will be powered by a volcano and financed through Bitcoin bonds. While it all looks pretty sci-fi in idea, Bukele is serious bent on it and will proceed as he plans.
No comments from the IMF or Bank of England will stop El Salvador from continuing its Bitcoin exploits. The country has just bought 100 extra Bitcoins following the latest price drops. It seems that the country is set on BTC as a national country to the delight of crypto fans around the world.
CBDC Incoming?
At the same event, Bailey was asked on the Bank of England’s plans for a digital currency of its own. Called CBDC, it’s only an idea that hasn’t taken shape so far. According to Bailey, there’s a strong global case for digital currencies, but he says that it needs to be stable for such a currency to be considered. Crypto assets are not, and that’s why he openly proposes the idea.
After his comments hit the web, El Salvador’s president Nayib Bukele struck back. He sent a sarcastic tweet about the Bank of England’s concerns, adding “Gotta love Bank of England!” in the end. He also mentioned that he’s concerned that the Bank of England is printing money out of thin air, adding points to already record inflation.
It’s clear that El Salvador’s move has enraged the big financial players and will continue to do so. The good news is that the country won’t back down, especially not after the president’s recently unveiled plans for a Bitcoin city.
