John Hopkins University’s applied economics professor Steve Hanke has expressed his concerns over El Salvador’s fate regarding its decision to turn Bitcoin as its legal tender.
He warned that this bold decision might result in economic collapse and currency chaos. Hanke also added that the Central American country will certainly be burnt if it goes through with its decision.
In an article on National Review titled “El Salvador’s Road to Currency Chaos and Economic Collapse”, he expressed both his concern and dismay over President Nayib Bukele’s persistence in his Bitcoin decision.
His concerns are similar to what the Department of State, International Monetary Fund, and World Bank have been expressing since the Bitcoin Law was passed.
Hanke said that even with these major entities’ repeated warnings, Bukele kept on ignoring them, and this could put El Salvador into total peril.
More risks ahead
IMF officials have warned that the Bitcoin Law could cause unstable commodity prices. Also, the nationwide use of Bitcoin could be a breeding ground for more anti-money laundering transactions, and worse, finance terrorist activities.
According to the Financial Action Task Force, an international anti-money-laundering and terrorist-financing authority, El Salvador has a clean record when it comes to money laundering transactions. But it has warned that through the country’s Bitcoin Law, this may change and taint the country’s record.
Crackpot idea
Hanke said that one of the major reasons why the Bitcoin Law was passed in the first place is because of Bukele’s authoritarian rule. According to the professor, it appears that the law was forced and wasn’t implemented for its people’s real needs.
”The markets are telling us that Bukele’s authoritarian tendencies and crackpot cryptocurrency ideas will result in currency chaos and economic collapse,” Hanke said.
Image courtesy of Cointelegraph News/YouTube
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