El Salvador’s tryst with bitcoin may prove costly

El Salvador’s tryst with bitcoin may prove costly

Is bitcoin about to become legitimate? Could it soon be printed with portraits of global heroes (Einstein on the 100 bitcoin bill, Marie Curie on the 1,000)? Could we soon buy a paper or a cup of coffee with it down the high street? That remains a long way off, surely. But Nayib Bukele, president of “plucky El Salvador”, as my colleague Simon Calder would call it, has announced that bitcoin will become legal tender – a first for any sovereign state. Central banks, including the Bank of England, have recently started taking cryptocurrencies more seriously. Elon Musk says he’s invested in it – and you can even buy a Tesla with some kinds. Even so, I can’t help but feel uneasy; cryptocurrency seems a lot like a speculative bubble. Like the rare tulip trade in the 1600s when speculation about the flowers caused prices to skyrocket, the cryptocurrency business in the 2020s is a popular craze powered by gossip and rumours. And if it becomes a widely accepted form of payment, it could evolve into something much more like a popular international currency (analogous to the IMF’s government-backed Special Drawing Rights), and you could have a bank account for