‘Currency chaos’ imminent in El Salvador, economist says

Finally, El Salvador has already shown the world that turning Bitcoin into a legal tender is indeed possible. But even with the law’s successful implementation in the country, the “Bitcoin Law” hasn’t received an overwhelming endorsement from known crypto advocates. 

Ephrat Livni, a New York Times reporter, has discussed the most pressing issues about the highly controversial law spearheaded by President Nayib Bukele. 

According to her, Bitcoin Law was “sold” to Salvadorans and to the world as an initiative to advance financial inclusion. And while the goal of the law is commendable, the biggest problem here is that an estimated 71% of the population is unbanked. 

Currency chaos

Economist Steve Hanke, a known critic of the Bitcoin Law, said that El Salvador might slide into what he calls a “currency chaos”. He added that one of the major problems with the new law is that 80% of the population is not even aware of Bitcoin’s value. 

“According to a survey by @StatistaCharts, the majority of Salvadorans did not know the price of Bitcoin in USD. Less than 20% of respondents answered correctly. Currency chaos in El Salvador,” Hanke tweeted. 

Livni said that while Bitcoin and DeFi services have clear benefits for economies and citizens, achieving true economic liberation in El Salvador remains debatable. 

Yes, everybody will certainly agree that Bitcoin holds a lot of potentials, but its viability hasn’t yet been tested on a nationwide scale, which makes Bitcoin Law nothing but a giant beta test for the crypto’s large-scale capabilities. 

Clear violations

On top of the uncertainties surrounding the law, El Salvador has also violated the digital assets regulations of the Financial Action Task Force (FATF). 

Also, a lot of analysts point out that there was hardly any democracy in Bitcoin Law’s implementation, as it was smoothly passed in Congress without much debate, thanks to Bukele’s authoritarian rule. 

Image courtesy of Cointelegraph News/YouTube

Source: https://bitcoinerx.com/bitcoin/currency-chaos-imminent-in-el-salvador-economist-says/