Crypto

Bitcoin (BTC) Could Destroy El Salvador’s Economy, Says Steve Hanke

Following statements from El Salvador to accept Bitcoin as legal tender Steve
Hanke reacted by explaining the harmful consequences of this decision and questioned
how Bitcoin works as a means of payment.

In his opinion, an incomprehensible solution

Steve Hanke, professor of applied economics at Johns Hopkins University in Baltimore, released
reservations about the adoption of bitcoin as the national currency. According to him, this news can make
the country’s economy collapsed.

Senior economist during tenure Ronald Reagan from 1981 to 1982, Steve Hank described
Bitcoin as a purely speculative asset “Without fundamental”… Completely bearish in terms of
cryptocurrencies, he tweeted in April that “Cryptocurrencies were the future of money, not
Bitcoin “

During the interview on Kitko News On June 15, a university professor explained that
whales from Russia and China were now going to focus on El Salvador to release their
cryptocurrencies by clearing the country of US dollars:
“There is a risk of collapse of the economy of El Salvador, because all dollars can be
sucked in and there would be no more money in the country. They have no national currency. “
Calling El Salvador’s leaders “stupid”
, the economist doubted the function
what can borrow Bitcoin as a legal tender in a country where almost everything
payments are made in cash: “You are not going to pay your taxi fares with Bitcoin. it
funny […]… 70% of the country’s residents do not even have a bank account “
– he declared.

June 11th, JPMorgan, a leader in financial services in the United States, has released
the same feeling when explaining that I do not see any benefit for the country, but also that it is
This decision could weaken ties between El Salvador and the International Monetary Fund (IMF).

On the contrary, the American Central Bank for Economic Integration has confirmed that this
Bitcoin’s adoption was groundbreaking and created many opportunities. The multinational bank has
also stated that she would form an advisory service to assist El Salvador in his
transition.

Teacher Hanke suggested that “Dark forces were behind it all”and what they
wanted to get hold of US dollars. In conclusion, he expressed reservations about
objects in the country for the convenient use of cryptocurrency.

What to think about these statements?

I wouldn’t pretend to say this Steve Hanke don’t know what he is talking about cryptocurrency is coming
undoubtedly defeat classical economics, etc., but I think it is still necessary
to add some nuance to these comments.
As for the sudden interest of whales in Savaldor, the question is more than legitimate. Gregory
Raymond noted that after the advertisement appeared, the search for housing in El Salvador increased dramatically.
on google:

El Salvador real estate

But why suddenly take an interest in El Salvador when countries are offering more?
for a long time very favorable taxation for cryptocurrencies (Portugal, Turkey, Malta, etc.),
for more favorable living conditions?

Then there is the infrastructure problem. I agree with his position that currently
accepting Bitcoin as legal tender won’t help much.
From point of view Naib bukeleThis decision is part of a much longer term process. Everything
the crypto believers will tell you that we must strive for longer time horizons: 2, 5, 10, 20 years!

With the support of American banks, El Salvador will develop its payment solutions:
creation of bank accounts and credit cards for residents, crypto-compatible payment terminals and the development of related financial services.

The goal is to arm residents and traders to gradually reduce dependence on the dollar.
A rather negative view of Bitcoin amid a conspiracy? Indeed, we can relativize with
statements Steve Hanke.

The introduction of Bitcoin will not lead to revolutionary changes in the country’s economy by the end of 2021, but will allow El Salvador to become a “pioneer” in this area. I’ll end by quoting Winston Churchill : “It’s always wise to look ahead, but it’s hard to look further than you can see.”

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The comments and opinions expressed in this article are those of the author only and should not be construed as investment advice. Do your own research before making any investment decisions.

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