El Salvador’s ‘stupid’ decision to adopt bitcoin as legal tender could collapse the economy, economist Steve Hanke said

El Salvador’s ‘stupid’ decision to adopt bitcoin as legal tender could collapse the economy, economist Steve Hanke said

El Salvador's move to classify has the potential to completely collapse its economy, Steve Hanke, professor of applied economics at Johns Hopkins University, said in a on Tuesday. After describing President Nayib Bukele and members of government who voted to pass the law as "stupid," Hanke raised doubts about whether the cryptocurrency could work smoothly for everyday use in a country where most citizens don't have bank accounts. The economist, who served on former President Ronald Reagan's council of economic advisers in the 1980s, suggested criminal interests may have helped bring about the Latin American nation's adoption of cryptocurrency. "The criminal element wants to be able to get in and actually obtain real legal greenbacks," he said. "They want greenbacks. And greenbacks are, in fact, the legal tender and money in El Salvador." Hanke predicted bitcoin holders in Russia or China would exploit El Salvador's citizens to cash out their holdings, ultimately draining the country of US dollars. "It has the potential to completely collapse the economy, because all the dollars in El Salvador could be vacuumed up and there'll be no money in the country," he said. "They don't have a domestic currency." Governments and central banks around the