What is really behind El Salvador’s ‘Bitcoin Law’? Experts answer
Cointelegraph
Published Jul 02, 2021 11:15AM ET
Updated Jul 03, 2021 01:40PM ET
“In the past, El Salvador struggled with trust in its monetary policy, so in 2001, it ‘dollarized’ its economy and effectively gave control of its monetary system to the U.S. Federal Reserve. It saw the U.S. dollar as a more stable, trustworthy currency than its own.
Since the 2008 global financial crisis, the U.S. has been pursuing a very experimental form of monetary policy involving tools like quantitative easing and a central bank that now directly monetizes, or purchases, government-issued debt to keep interest rates low. This is a playbook that is dictated by short-term needs and is driving down the value of the dollar. For a country like El Salvador, the adoption of Bitcoin as a legal tender is a hedge that Bitcoin will retain its value over the long term versus the dollar that has seen unprecedented levels of loss in buying power.
Continue Reading on Coin Telegraph
Get The News You Want
Written By: Cointelegraph
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.