JPMorgan has reacted to El Salvador’s move to adopt Bitcoin as a legal tender in the country. According to the banking giant, the BTC adoption is of little benefit to the economy. In a client note posted by DocumentingBTC on Twitter, JPMorgan explained:
“As with dollarization in the early-2000s, this move does not seem motivated by stability concerns, but rather is growth-oriented…but it is difficult to see any tangible economic benefits associated with adopting Bitcoin as a second form of legal tender, and it may imperil negotiations with the IMF.”
Notably, El Salvador is currently discussing with the International Monetary Fund (IMF) regarding a $1 billion funding program. At the same time, the country is facing a potential shortage of $3.2 billion in its 2021 budget.
IMF spokesperson, Gerry Rice, noted that El Salvador approving BTC as a legal tender raises legal and financial concerns.
Head of the innovation hub at the Bank for International Settlements, Benoît Cœuré, referred to El Salvador’s move on Bitcoin as an “interesting experiment.” While speaking at the launch of the BIS’s 4th innovation hub in England, Cœuré said that BIS does not see BTC as an approved means of payment. He added that Bitcoin is simply a speculative asset and should be regulated in the same way.
Image Credits: Pixabay
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