Are Central Banks Coming Around To Crypto After Meeting To Discuss Bitcoin In El Salvador?
The relationship between crypto and traditional central banks has not always been the best.
IBM penned a blog post in April 2022, noting “the instability of cryptocurrency poses a challenge to central banks.” A month earlier, the Central Bank of Ireland released a fresh warning concerning crypto investment.
“While people may be attracted to these investments by the high returns advertised, the reality is that they carry significant risk, they said.
However, other financial authorities appear to be taking a more strident approach towards cryptos like Bitcoin. For example, mid-May brought an announcement from El Salvador’s President on Twitter. Bukele explained how he’d invited dozens of central banks and financial authorities to the Central American nation to “discuss financial inclusion, digital economy, banking the unbanked, the #Bitcoin rollout and its benefits in our country.”
El Salvador’s Bitcoin Summit Welcomed Central Bankers From Across The Globe
President Nayib Bukele Tweeted out a participant list. The list includes representatives from nations in Asia, Africa, South America, and the Middle East. The three-day event, organized by El Salvador’s central bank and the global Alliance for Financial Inclusion, was described by President Bukele as “planting seeds.”
Reporting from CoinTelegraph noted that team members from El Salvador’s ‘Bitcoin Beach’ were on hand to educate attendees. The Bitcoin Beach project preceded the adoption of Bitcoin as a legal tender in September 2021. The ‘Beach’ is a crypto-friendly area of El Zonte village where residents and visitors can transact with Bitcoin.
Nicholas Burtley, the co-founder of the company that built the Bitcoin Beach wallet, told CoinTelegraph how his team spent time speaking with central bankers and showing how to use Bitcoin Lightning wallets. However, he later Tweeted, “we can’t onboard the central banks fast enough to #bitcoin with the BTCBeachWallet.”
Now, the small Central American nation of El Salvador has quickly become a global leader in the Bitcoin scene.
President Bukele himself has attracted headlines for several large Bitcoin purchases to bolster the nations’ coffers. He announced a 500 Bitcoin buy in early May that brought El Salvador’s holdings to 2,301 coins.
Bukele has been a strident advocate of cryptocurrency. He spearheaded the launch of the ‘Chivo’ e-wallet and a network of Bitcoin ATMs across the country to foster adoption.
Central Banks Express Interest In Bitcoin Even As Global Financial Entities Sound Off
The so-called ‘Davos for Bitcoin’ looks to be a watershed moment. The decision for dozens of central banks and financial entities to visit El Salvador came just a few months after the International Monetary Fund urged El Salvador to nix Bitcoin’s legal tender status in the country.
While the IMF “stressed that there are large risks associated with the use of bitcoin on financial stability,” the summit in El Salvador suggests there are plenty of voices among central bankers at least, who would argue otherwise.
Nations represented at the summit included Kenya, Nigeria, and Egypt. All three have sizable amounts of younger citizens and strive to become more prominent players in global economics.
It took years for one country (El Salvador) to turn to Bitcoin as a legal currency. However, their move spurred the Central African Republic to do the same in late April 2022, a monumental achievement for a cryptocurrency that many claim has no intrinsic value.
While there’s still much uncertainty in the crypto world, the momentum seen in the last several months suggests that Bitcoin still has a place at the table within central banks across the globe.