JPMorgan made a negative comment about El Salvador’s Bitcoin regulation.
JPMorgan Chase & Co., the largest US bank, has commented on El Salvador’s big decision to make Bitcoin the official currency. In his latest note, he writes that it is “difficult” to see any “concrete economic benefit” in the adoption of the largest cryptocurrency.
The bank adds that the country’s decision to adopt Bitcoin as its second legal currency could jeopardize its negotiations with the International Monetary Fund, as El Salvador is in talks to secure a $1.3 billion loan from the IMF to boost its economy after Bukele’s election win.
On top of that, JPMorgan claims that this decision could affect the way Bitcoin is handled by much larger economies:
In practice, such a change would be the unintended consequence of laws and regulations that precede significantly and understandably do not prescribe cryptocurrency, but these moves could be further complicated if this is the start of a broader trend among similarly situated, smaller countries.
A provocative move
As reported by U.Today, the IMF commented that El Salvador’s Bitcoin regulation, passed by a majority vote earlier this week, raises legal and financial issues.
While the law marks a major moment in the Bitcoin revolution, it could also make it harder for the tropical country to get the $1.3 billion loan from the organization.
However, the government wants to grant permanent residency to those who invest 3 BTC in the country’s economy, and also to generate income for its economy by using the geothermal energy produced by the volcanic mountains for renewable cryptocurrency mining.
Still, Benoît Cœuré of Bank for International Settlements described the Bitcoin adoption law as an “interesting experiment”.