An official at the Bank for International Settlements (BIS) and former board member of the European Central Bank (ECB), Benoit Coeure, insists that Bitcoin failed the test as a means of payment. He calls El Salvador’s step to make the legal tender of the cryptocurrency an “interesting experiment”.
BIS officials doubt Bitcoin can act as a means of payment in El Salvador
Benoit Coeure, Head of the Innovation Hub at the Bank for International Settlements (BIS), commented on El Salvador’s move to make Bitcoin legal tender. He said at the opening of a regulatory research center at the Bank of England (BoE):
El Salvador is an interesting experiment indeed.
As a member of the BIS Executive Committee, Benoit Coeure was appointed Head of the Bank’s Innovation Center in 2020. He was previously a member of the Executive Board of the European Central Bank (ECB). From 2013 to 2019 he was Chairman of the BIS Committee on Payments and Market Infrastructures.
El Salvador became the first country in the world to adopt Bitcoin as its national currency alongside the US dollar after its Congress passed a bill on Wednesday to establish cryptocurrency as legal tender. The country is currently researching mining using energy from volcanoes.
We at the BIS have made it clear that we do not regard Bitcoin as a means of payment. Bitcoin is a speculative asset and as such should be regulated.
The BIS official isn’t the only one to raise concerns that Bitcoin is legal tender in El Salvador. The International Monetary Fund (IMF) said Thursday that “the introduction of Bitcoin as legal tender raises a number of macroeconomic, financial and legal issues.”
Many countries, including the US, are now stepping up their efforts to regulate cryptocurrencies. This week, major economies’ financial regulators proposed additional capital requirements for banks that hold crypto assets.
What do you think of Benoit Coeure’s comments on Bitcoin in El Salvador? Let us know in the comment section below.
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