The Bank of Spain, the country’s central bank, criticized El Salvador’s approach when announcing the bitcoin legal tender last month. In a report titled “The Role of Crypto Assets as Legal Tenders: The Example of El Salvador”, the bank examines the country it encountered while implementing its bitcoin strategy and expresses concern about how some steps have been taken with transparency.
Bank of Spain verifies El Salvador’s bitcoin bets
The Bank of Spain has issued a verification-selection report after the entry of El Salvador into the bitcoin world. The report, titled “The Role of Crypto Assets as Legal Tenders: The Example of El Salvador,” written by Sergio Gorjan, General Directorate of Operations, Markets and Payment Systems, states that as the first driver, El Salvador made many promises in legal tender. Wrong in implementation.
One of the main concerns of the Bank of Spain is the relative lack of transparency displayed by the project. The report states:
Lack of opacity and lack of sensation with which the project has been completed is another limiting factor. Thus, the major global rating agencies have agreed to a downward revision of El Salvador’s sovereign credit rating.
Other problems found
The Bank of Spain has found other problems regarding El Salvador’s move towards bitcoin. The company agrees with the opinion of Ethereum co-founder Vitalik Butarin, who said that forcing Bitcoin virtually on a trained, non-crypto-intelligent population is risky. The Bank of Spain emphasizes:
With more than 50% of the population with Internet access and a market share of smartphones, El Salvador lags behind Central American countries in terms of the level of digital training.
However, the bank praised El Salvador for taking steps to address concerns about using bitcoin for terrorist financing or money laundering purposes. The bank said the regulations issued by the country make it possible to think carefully about these issues and strengthen control measures against these risks.
What do you think of the Bank of Spain’s views on El Salvador? Tell us in the comments section below.
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