The Bank of Spain, the Central Bank of the country, criticized the adoption method El Salvador selected once declaring Bitcoin medium of exchange last month. During a report titled “The role of crypto assets as legal tender: the instance of El Salvador,” the bank examines many pain points the country encountered, applying its bitcoin strategy, and raises considerations concerning, however , some actions are loving very little transparency.
Bank of Spain Scrutinizes El Salvador’s Bitcoin Bet
The Bank of Spain issued a report scrutinizing and reflecting upon the doorway of El Salvador into the Bitcoin world. The report, titled “The role of crypto assets as legal tender: the instance of El Salvador,” written by Sergio Gorjón, of the overall board of directors of Operations, Markets and Payment Systems, states that as each first-mover, El Salvador committed several mistakes within the implementation of Bitcoin as medium of exchange.
One of the principal worries of the Bank of Spain needs to do with the relative lack of transparency the project has exhibited. The report states:
The opacity and lack of accord with that the project has been allotted has been another limiting issue. Thus, the most international rating agencies agreed to hold out a downward revision of El Salvador’s sovereign credit rating.
Other issues Found
The Bank of Spain found different issues concerning El Salvador’s move towards Bitcoin. The establishment in agreement with the opinion of Vitalik Buterin, co-founder of Ethereum, who expressed that nearly forcing Bitcoin on a primitive, non-crypto-savvy population was risky. The Bank of Spain stressed:
With simply over five 50% of its population with web access and a market share of smartphones that hardly reaches 40%, the Republic of El Salvador is very cheap compared to other Central American countries in terms of the amount of digital coaching.
However, the bank praised El Salvador for the measures it’s taking to deal with the concerns of use of bitcoin as a method of financing terrorist acts or for hiding functions. The bank expressed that the regulation issued by the country contemplates these issues during a thorough method, and makes it attainable to bolster management measures against these risks.