Andrew Bailey, the Governor of the Bank of England; has expressed concern about El Salvador's move to legalize Bitcoin as legal tender throughout the country. He has shown his concern about the volatility of the cryptocurrency market and has raised the question of whether Salvadorans are aware of the risks that their government is taking when using cryptocurrency throughout the country.
These statements have come out at a conference at the Cambridge University student union, when asked about his opinion of the cryptocurrency market. The idea of El Salvador is to have a secondary currency that does not depend entirely on an external country, since they use the US dollar as their national currency is in disuse, but it seems that the remedy may be worse than the disease.
The use of cryptocurrencies at the national level is worrying
Bailey's comments come in the context that England is looking into the launch of a national digital currency. They do not underestimate the value of cryptocurrencies, but believe that they should have a stable value if used for payments in shops or payroll.
Due to the tax evasion problems that they bring, in addition to their energy consumption, several countries, such as India, South Korea and the United States, are studying ways to regulate the cryptocurrency space. In early November, the International Monetary Fund also warned El Salvador against using Bitcoin as an official currency. The complaints were the same: its volatility implies many risks for users.
Meanwhile, Nayib Bukele, the president of El Salvador, has accelerated the adoption of Bitcoin in the Central American country. Currently, El Salvador has about 1.220 Bitcoin tokens worth about $ 70 million, and they are considering building a district that works entirely with Bitcoin.
