- Professor of Applied Economics says Bitcoin will empower corruption.
- In a tweet, he draws a correlation between Bitcoin and its use for illicit activities.
- He says countries with high corruption rates have decided to legalize Bitcoin.
Economist claims that countries who are legalizing Bitcoin as a tender in its nation could be doing so to partake in corruption. He implies that since BTC has been used for illicit activity, it is not a far-off conclusion to draw.
In detail, the economist is Steve Hanke, a Professor of Applied Economics at Johns Hopkins University. The Professor took to Twitter to state his observation on the matter.
#EconWatch: As #ElSalvador adopts #Bitcoin, 5 other Latin American countries are considering similar initiatives. Like El Salvador, all of these countries score extremely poorly on global corruption indices. #BTC is highly correlated with high levels of corruption. pic.twitter.com/EGToWp2bPk
— Steve Hanke (@steve_hanke) June 26, 2021
First, he noticed that a total of five Latin and Central American nations have already or are planning to make BTC a legal tender. In particular, El Salvador was the first to announce that it made BTC a legal tender in its nation.
Next, Panama refused to be left behind and said that it would be the next crypto nation. This move quickly led to another spark. This time it was Paraguay hinting that it too would follow El Salvador’s lead.
Besides these, Hanke adds that Mexico, Brazil, and Argentina too have spoken of making Bitcoin a legal tender. In his tweet, Hanke draws a comparison saying that all these nations already rank poorly on the global corruption scale. Much like El Salvador, all these nations run high on corruption.
The tweet saw an interesting variety in the comments. Some say fiat is already a huge factor in corruption. One reply laughs, what is the difference between Bitcoin and fiat when it comes to corruption?
Other comments compare the 1% who escape taxes, is this not a contribution? Another brings in conspiracy theories. It seems the public is already well aware that the means is not the way to stop corruption but to aim their anger at the root of the cause — the people in power.
Hanke however, says that El Salvador uses the dollar for its fiat currency. Thus, since it has no local currency, the nation could experience an economic collapse. He says this could happen when BTC holders from other countries will cash out the crypto and target El Salvador. Hanke says this is a huge possibility since the country has no Bitcoin police force. Meanwhile, El Salvador is wasting no time in making the best of its decision. So far, the country has begun bringing in BTC ATMs. Moreover, it is also working on a plan to generate geothermal power from its volcanoes to mine Bitcoin.