Bitcoin News: Steve Hanke, a professor of applied economics at Johns Hopkins University, says that El Salvador’s legalization of Bitcoin puts the country at risk of sanctions.
El Salvador’s Bitcoin move could face sanctions
Hanke, who is also the director of the Troubled Currencies Project at the Cato Institute in Washington DC, noted that El Salvador’s move to adopt the world’s leading cryptocurrency will see backlash for violating the country’s Financial Action Task Force standards.
Hanke’s project is a body authorized by the G7 countries to combat money laundering and terrorist financing. According to Hanke, this move by El Salvador could result in sanctions.
“Sanctions may come up, we don’t know what will happen. Such moves and sanctions per se restrict activity in financial transactions and can initiate a transition from light congestion to hard congestion.”
“It is not possible for them to come out clean from violations”
In a new interview published in Kitco News, the applied economist states that about half of the breaches identified by the Financial Action Task Force could be brought to the fore by El Salvador’s Bitcoin move.
“Of the 58 misconduct tracked by the Financial Action Taskforce, 27 were breached, most likely with Bitcoin. It’s almost impossible to come out clean under the proposed Bitcoin law that El Salvador will implement on September 7.
Hanke also says that El Salvador’s President Nayib Bukele’s move to give $30 worth of BTC to each of its 4.5 million citizens raises questions.