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The ECLAC executive secretary emphasised that no research has yet been conducted to evaluate the possible dangers or advantages of El Salvador using Bitcoin as legal money.
The Economic Commission for Latin America and the Caribbean, or ECLAC, is the latest authority to express worry over El Salvador’s plan to accept Bitcoin (BTC) as legal money.
ECLAC executive secretary Alicia Bárcena has warned that El Salvador’s Bitcoin move poses a number of systemic risks as well as risks related to money laundering, local news agency Diario El Mundo reported Friday.
Bárcena underlined that no research has yet been conducted to evaluate the possible dangers or advantages of El Salvador recognising BTC as legal currency. She expressed confidence that El Salvador will face scrutiny and dangers from the Financial Action Task Force, or FATF, as a result of its plan to enter the Bitcoin market.
According to the official, Bitcoin does not perform several basic functions of money and is susceptible to significant volatility, which might pose “multiple systemic risks” in a dollarized economy.
In issuing the warning, the ECLAC joins a growing number of worldwide authorities and groups worried about El Salvador’s intention to accept Bitcoin as legal money following the announcement of historic legislation by Salvadoran President Nayib Bukele in early June. The International Monetary Fund was among the first regulators to raise the issue, saying that adopting Bitcoin as legal money in the country might cause legal and financial problems.
On June 17, the World Bank declined El Salvador’s request for assistance in the country’s transition to Bitcoin, citing concerns about Bitcoin’s purported environmental effect and transparency. Earlier today, deputy governor of the Bank of Russia Alexey Zabotkin voiced alarm over El Salvador’s Bitcoin decision, stating that big economies are unlikely to follow the country’s demand to embrace BTC as legal money since it poses dangers to financial stability.y.