Steve Hanks, a professor of economics has criticized El Salvador’s acceptance of Bitcoin as a lawful means of exchange and has predicted that the new policy could lead to economic crash down in the country. He wonders how crypto will be used for everyday trading in the country. Steve worked under President’s Ronald tenure as a professional economist between 1981and 1982.
The professor had in the past declared that Bitcoin had no intrinsic value. In April this year, he posted on his twitter page that altcoins not Bitcoin were the hope of money. In an online session with Kitco News on June 15, Steve said that Bitcoin investors from other areas could exploit the El Salvador and empty it of its U.S dollars. The country has no local currency and if emptied of its dollars, there will be a crash in the economy.
During the interactive session, the professor dubbed the legislators of El Salvador as unintelligent to have signed the bill for crypto adoption. He stressed the difficulty of using the currency for daily operations noting that the citizen were majorly real money dependent.70% of them according to him do not have accounts with banks.JPMorgan in like manner on June 11 stated that there were no evident reasons economically that warranted raising the status of Bitcoin to legal tender. This the firm opined may become an impediment to the relationship of the International Monetary Fund with the country.
The Central American Bank for Economic Integration however shares a different view as they have praised the bold step taken by the country in adopting Bitcoin. The bank has also announced that they will form a board to ensure that the country successfully transits to using Bitcoin as a means of exchange.
Professor Steve has also condemned payments with Bitcoin that has gained acceptance across some regions and dubbed it as useless. This is because the need to change the coins to dollars before utilization is still there.A publication by David Gerard in Foreign Policy asserted that the recent move by El Salvador could be a way to get dollar liquidity from the populace to enable her clear international debts.
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