It is not new news regarding Bitcoin adoption that El Salvador is the first country accepting Bitcoin as its legal tender; many countries have shown the will to do so but never got through with it. Anyway, the country did go through with it, and at the moment, there is nothing wrong going on financially with El Salvador. Steve Hank, a professor at the John Hopkins University, highlights how inconvenient and unsettling it would be for El Salvador as it has adopted Bitcoin into its core financial operation. The country was not ready for the move despite World Bank stating; otherwise, El Salvador went for it.
The worst-case scenario, according to Steve, is the economic collapse within the country; according to the professor, the country would be burnt out if they don’t stop right away with their further implementation of Bitcoin into their financial accolade. The instability is expected to cave in as early as September. Professor Steve highlights all the notable points in his new paper featuring the implementation of Bitcoin by El Salvador and the economic collapse it will bring.
El Salvador Should have Consulted more Before Embracing Bitcoin
These spotting elements were the warnings issues by IMF, World Bank, and US Department of state to El Salvador for revising its decision regarding the approval of Bitcoin as a legal tender. But El Salvador didn’t care much for it and went with its intuition. The most common reservation was that cryptocurrency such as Bitcoin can be used for money laundering within the country or, worst yet, for other various illicit activities, and this would eventually bring about economic collapse going through the currency chaos within El Salvador. Many other corporations and organizations in place to stop money laundering and the use of cryptocurrencies for illicit activities have shown the same reservations about El Salvador’s move regarding the implementation of Bitcoin as its legal tender. Enough data is not present at the moment to ascertain whether or not the professor has something rock solid to go with, but it definitely points some fingers towards El Salvador’s hasty move to embrace the crypto space.