US economist Steve Hanke announces El Salvador’s Bitcoin law by saying it could be a trigger for international sanctions against the Central American country.
It’s no secret Hanke is an avid opponent of the leading cryptocurrency. He recently called the transition to making Bitcoin a legal tender in the country “stupid”. He also said El Salvador’s economy would collapse as a result.
Bitcoin supporters may reject Hanke’s comments. But what is the reasoning behind his thinking?
El Salvador is going for a Bitcoin
To justify its position on Bitcoin, Hanke El Salvador called the Bitcoin Act a compulsory bidding law. He gave the example that a grocery store owner had no choice but to accept Bitcoin as payment for groceries.
“It actually makes the forced bid because it forces any recipient, let’s say a merchant, you run a merchant. Someone comes in with Bitcoin and they will buy groceries, you will be forced to take it. So it̵7;s a compulsory procurement law. ”
However, Strike CEO Jack Maller has already addressed this concern in a recent CNBC interview. He said no one is forced to hold Bitcoin or even accept it for payment.
Maller clarified by saying that the Bitcoin law is more about interoperability with the existing dollar system. Users of the national wallet can switch between BTC and dollars. As such, a merchant who prefers to receive dollars may choose to do so.
“We allow dollars, like a traditional US bank account, to be interoperable with this open monetary network. So you can send and make Bitcoin payments in dollars and receive Bitcoin payments in dollars. ”
President Bukele unveiled the official national Bitcoin wallet, called “Chivo,” in late June. It works on Lightning Network, making it fast and inexpensive to use.
Hanke says it’s about hiding illegal activities
Hanke said El Salvador had enjoyed several economic benefits due to a dollarized system, such as rising exports and consistently having the lowest inflation in Latin America. When that is the case, he then argues, why should anyone want to de-dollarize in favor of Bitcoin?
In answering the question, Hanke turns to standard anti-crypto answers – to help crime.
“The more you look at it, the more obvious it is that you have some dark forces and probably criminal shysters behind the case.”
Hanke put forward his argument, referring to the recently issued announcement by the U.S. State Department that appointed 14 members of the El Salvador government in connection with evil activities.
“They named 14 El Salvadorans who were bad actors associated with undemocratic activities, corruption, money laundering, whatever they say, all under the sun. And 11 of the 14 who were named are close to the president of El Salvador, Bukele. ”
Following this thread, Hanke said that the Bitcoin law, when “examined under the hood”, is designed to facilitate criminal activity and turn the country into a “money laundering”.
Hanke is still convinced that there is no such crime in El Salvador’s dollar system. He then suggests that the Bitcoin law will further strain international relations until sanctions can come.