While commenting on the legalization of Bitcoin in El Salvador by the country’s head, Christine Lagarde, President of the European Central Bank (ECB) said that the bank’s policy regarding Bitcoin is still the same. El Salvador is a sovereign state and has the right to choose what is best for the country. However, the economic and financial situation of El Salvador is not such where the President should take the risks of engaging with something which requires thorough examination and years of study.
Heads of the central banks and international banks are not appreciating the fact that Bitcoin has received legal tender in El Salvador. However, within the crypto community, the initiative taken by President Nayib Bukele is being appreciated wholeheartedly. Even the whole Bitcoin community is lauding the country’s efforts in using volcanoes for producing electricity for the purposes of Bitcoin mining.
The first objector was the International Monetary Fund (IMF) which literally disapproved legalization of Bitcoin by El Salvador’s President. Now the President of ECB has been asked to share the bank’s view regarding Bitcoin and the legalization of Bitcoin in El Salvador.
Christine Lagarde started off by stating that first of all ECB is an independent collective body serving a number of states. The policy of ECB is still the same as it was prior to El Salvador legalizing Bitcoin. There hasn’t been any change nor there will be in the near future. She said that El Salvador too is an independent sovereign state and can decide what is or is not in favor of the country and its people. However, it is indebted to the IMF, and IMF’s concerns are genuine because crypto is a risky business. IMF has a stake as well as interest in the economic and financial situation of El Salvador. So obviously the matter is in between El Salvador and IMF and requires urgent attention.
However, she said that in her personal opinion El Salvador should have kept it disassociated with Bitcoin or crypto. It is not the right time for the country to be in the position of taking the risks of engaging with extra-terrestrial means of payment alternatives. She said that before taking the decision, the country should have examined crypto from all angles. The decision of legalizing Bitcoin is a hasty decision taken in desperation, suggested Lagarde.
Prior to June, Lagarde was seen suggesting that money laundering at the global level is increasing. She held crypto responsible for the increase of money laundering and insisted upon immediate regulation.
Yet the bill for legalizing Bitcoin has duly been passed in El Salvador, even though IMF had its objections. Even the Bitcoin mining facilities have started to be developed at different sites of volcanoes. She also does not think that the world needs Bitcoin or any kind of digital currency.