Expert: Governments Adoption of Bitcoin Undermines US Policies

Bobby Ong, co-founder and COO of cryptocurrency analytics firm CoinGeek, said that by adopting bitcoin as legal tender, El Salvador is replacing US monetary policy (which drives the global financial system).

Washington – Sputnik. He added, in statements to “Sputnik” agency, that this may lead to increased adoption of cryptocurrency by governments around the world and attract foreign investment to the country.
Earlier this week, the Latin American country made headlines after becoming the first country in the world to use cryptocurrency as legal tender.

With this move, authorities hope to save millions annually in fees charged for sending money from abroad, mostly from Washington.

“El Salvador is an interesting test of bitcoin being adopted as the national currency because the country does not use its currency in it but it is a dollar-based economy,” Ong said.

“In this sense, replacing the US dollar with bitcoin is an interesting angle because the country is essentially replacing the monetary policy of the US government with a programmed fixed bitcoin monetary policy,” he added.

He added that there is an argument to be made that the risks to the country may be lower compared to a country that already has a well-functioning national currency.

Ong noted that other countries with dollar economies will follow this economic experiment closely to see if they can also follow suit.

Meanwhile, hundreds of residents of the country did not welcome the decision of the government of El Salvador who marched against the adoption of bitcoin on the day it became legal tender. The protesters, including social and civic organizations and farmers, said they viewed the move as an attempt to launder money.