Bank of England governor worried about El Salvador’s bitcoin adoption

Bank of England (BoE) Governor Andrew Bailey has expressed concern over El Salvador’s move to legalize bitcoin as a legal tender. Andrew Bailey has expressed concern about the volatility of the crypto market and has questioned whether residents of Salvador are even aware of the threats his government is facing. Andrew Bailey speaks about the crypto market while speaking at the Cambridge University Student Union. Due to its unregulated and decentralized nature, the crypto market has become a matter of concern for governments across the world.

News portal City AM has launched its Report “It worries me that a country will choose this as its national currency,” Bailey is quoted as saying. What worries me most is whether the citizens of El Salvador understand the nature and volatility of the currency they hold.

Bailey’s comment is also part of the backdrop of England thinking of launching a national digital currency. Andrew Bailey said that in my view digital currencies should be stable, especially if it is being used for payment.

At present, cryptocurrencies are not governed by any bank or financial intermediary. Instant and non-traceable cross-border fund transfers can be facilitated by using crypto tokens such as bitcoin and ether. Many countries including India, South Korea and the US are exploring ways to regulate the crypto space.

Earlier in November, the International Monetary Fund (IMF) also warned El Salvador against using bitcoin as an official currency. Meanwhile, El Salvador President Nayib Bukele is accelerating the adoption of bitcoin in the country.

At present, El Salvador has 1220 bitcoin tokens worth $70 million (approximately Rs 524 crore). Bitcoin is being used as a legal tender with the US dollar in El Salvador since September. More than 200 bitcoin ATMs have also been installed across the country.

Recently the President of El Salvador also revealed his plans to build a Bitcoin City at the base of the Conchagua Volcano. Smaller countries like Tonga and Palau are also discussing legalizing bitcoin as a legal tender.