Former Deputy Governor of Bank of China, Wang Yongli, criticized the recent move by El Salvador to grant legal tender status to Bitcoin. His comments have faced heavy fire from several industry bigwigs from China, who have come out in contradiction to his statement.
El Salvador Becomes First Country To Legalize Bitcoin
On June 9th, El Salvador’s President Nayib Bukele tweeted that Congress had passed his bill to make Bitcoin legal tender, making this Central American nation the first in the world to do so. About 20% of El Salvador’s GDP is dependent on remittances, which is money sent home by over 2 million Salvadoreans who live abroad. A BBC report speculates that adopting the digital currency will allow family members to avoid the high charges of sending money home each month.
Furthermore, with 70% of the population living without access to traditional banking institutions, Bitcoin payments that can be conducted through smartphones are being seen as more financially inclusive.
Landmark Move Criticised By Former Bank Of China Deputy Governor
While many crypto enthusiasts heralded this decision, the former Deputy Governor of Bank of China, Wang Yongli criticized the move, saying,
“El Salvador and other countries that lack sovereign currencies lack the most basic understanding of currency. Using Bitcoin as legal tender can only seek a dead end.”
According to Yongli, small countries like El Salvador that are more dependent on the USD than their own currency are making the switch to cryptocurrency to get rid of the control of the USD. He cites the example of Venezuela, which used Ethereum encryption technology to launch their oil-based crypto known as the ‘petro.’
He believes that the decision is based more on illusions about cryptocurrency and not on facts. Therefore, even though it might be exciting for the currency circle, the expectations pinned on it might be too high, according to Yongli.
Yongli Criticized By Own Countrymen Over Disparaging Remarks
Wang Yongli’s comments about the legalization of Bitcoin in El Salvador were met with many critical responses, especially from other Chinese individuals.
Award-winning Chinese journalist Colin Wu reported the remarks made by Yongli and the criticism he is facing in China. He further clarified about Bank Of China, where Yongli used to be the Deputy Governor, saying,
“It should be noted that this is only a commercial bank, not a central bank.“
Also, Chairman of Bitdeer and Co-Founder of Bitmain, Jihan Wu also dismissed Yongli’s claims, saying,
“Since it allows multi legal tenders, it will not have the negative impact mentioned by Wang.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.