The adoption of Bitcoin as a legal tender has been questioned and criticized by Steve Hanke as what would be the procedural method of Bitcoin operations in routine transactions. A professor of applied economics at Johns Hopkins University, Steve Hanke, has alarmed the country about the risk of complete economic destruction brought by El Salvador’s adoption of Bitcoin as a legal tender.
Under President Ronald Reagan, between 1981 and 1982, Steve Hanks provided his service as a senior economist. Previously, it has been disclosed by him that Bitcoin is a speculative asset having zero as a fundamental value. He further tweeted in April that cryptocurrencies are adding more money, but Bitcoin is doing the opposite.
The university professor, in a streamed news provider regarding finance by Kitco News on 15th June, spoke about the Bitcoin holders belonging to the countries like China and Russia to aim at El Salvador for converting their holdings into cash which would specifically drain out all the U.S. dollars in the country. The reason behind this vacuum, the professor, discloses, is that the country does not have any local currency.
He remarked, in the interview, that all the votes being cast in favour of Bitcoin law as a legal tender on the proposal of President Nayib Bukele were stupid. He further questioned the functionality of BTC as a legal tender in real transactions in a region where a greater percentage of people rely on cash, mentioning that one cannot pay for his taxi ride using Bitcoin.
On 11th June, some similar statements have been echoed by JPMorgan but in an elaborative manner by affirming that there were fewer expectations about any considerable benefits related to Bitcoin’s adoption as a legal tender, and the negotiations with IMF might get endangered by this move.
However, the CABEI (Central American Bank for Integration) is not of a similar view. Rather it expressed yesterday that BTC’s adoption by El Salvador is ingenious and has helped create new opportunities and spaces.
A trenchant critic of Bitcoin and the author of the book Attack of the 50 Foot Blockchain, David Gerard, propounded that because of the inability to print U.S. dollars, El Salvador has adopted BTC, which might be a part of the plan to repay the foreign debts by gaining the liquidity of U.S. dollar from the citizens.