Professor of Economics warns: BTC could “completely collapse the economy” of El Salvador!

The economist criticizes Salvador

Steve Hanke criticized the acceptance of BTC as legal tender in El Salvador and questioned how BTC would work in day-to-day transactions. A professor of applied economics at Johns Hopkins University literally warned that the decision had potential “Completely collapse the economy.”

As this is the first state to take a similar step, it is understandable that complications or fears may arise, which will later prove unfounded and will be attributed back to fear of the new. Time will tell which category Hanke’s opinion will belong to.

The economist warns that foreign watchmen from Russia or China could target El Salvador and monetize their shares there until there is no dollar left in the country. It is not clear what led him to this idea, because there are many stock exchanges and other places that are better suited for such a purpose. In addition, BTC has been flowing away lately, while we have not seen any cases of a dollar ever running out.

“It has the potential to completely collapse the economy because it would be possible to suck up all the dollars in El Salvador and there would be no money in the country. They do not have domestic currency. “

A “stupid” decision

Hanke basically indicated that the President of El Salvador Nayib Bukele a the government has taken a stupid decision that will cause an economic collapse, justified by fears of Russia and China. He said it was “in one word stupidity” and questioned that digital cash could function as legal tender in day-to-day transactions in a country where most citizens rely on cash.

“You will not pay for a taxi ride BTC. It’s ridiculous […] You have 70% of people in El Salvador who don’t even have bank accounts. “

It is not clear to what extent BTC’s critics are able to understand that the absence of bank accounts may to some extent be a motivation to test the digital currency. A professor of applied economics at Johns Hopkins University added that they are “Behind it are clearly dark forces” in El Salvador. He joined other critics, such as JPMorgan, the World Bank (WB) and the IMF.

Conclusion

Economist Steve Hanke he came up with an alarming news about the Hodlers from Russia and China, who he said would pour their bitcoins on El Salvador’s head and pull all the dollars out of the country. The professor also described cross-border transfers in bitcoins as “nonsensical” because he thinks that the asset will need to be converted immediately into dollars in order to be used.

“If Grandma down in El Salvador is waiting for her transfers and you want to send bitcoins, like this, it’s okay, but what will she do? She has to go to an ATM to get dollars, because that’s the only way you can buy something. “ said Hanke, who clearly ignores the fact that BTC will be accepted in all stores in the country.