The President of the Inter-American Development Bank (IDB), Mauricio Claver Caroni, has confirmed that using bitcoin as a currency in El Salvador is “not the solution,” responding to an inquiry from the Salvadoran press about the impact. Cryptocurrency in the country.
The Legislative Assembly this month approved a law granting legal tender for bitcoin as the country’s currency, at the request of the executive branch. The rule will go into effect in September.
Claver Caroni noted that for a country like El Salvador, whose comparative advantage is monetary stability due to dollarization, the matter is complicated.
“I think the intentions of the government of El Salvador are good, but I think the issue needs to be studied in more depth because what governments are looking for and what I think the government of El Salvador is looking for is how to facilitate transactions, how to facilitate trade. How to do that in a transparent and secure way, but bitcoin is not a solution. Bitcoin adds volatility, and does not bring the stability that I think all countries in the region seek,” said Claver-Carone.
The government of El Salvador has confirmed that the adoption of bitcoin will reduce the costs associated with sending remittances and will attract investment into the country.