Pound crash: Bitcoin-loving El Salvador president mocks Bank of England

The strength of the pound fell to its lowest ever level against the US dollar on 26 September, 2022 (Getty Images)
The strength of the pound fell to its lowest ever level against the US dollar on 26 September, 2022 (Getty Images)

The president of El Salvador has responded to previous criticism from the Bank of England about his country’s bitcoin experiment by mocking the plummetting price of the pound.

The UK’s central bank was forced into taking emergency action on Monday after the pound crashed to an all-time low against the US dollar in the wake of Kwasi Kwarteng’s mini-Budget.

The Bank issued a statement warning that it would “not hesitate to change interest rates by as much as needed” to combat soaring inflation.

Nayib Bukele, who introduced the Bitcoin Law to the Central American country in 2021, posted a message to Twitter mentioning the official Bank of England account, writing “told you” in reference to a previous tweet warning that the bank was “printing money out of thin air”.

Last year, Bank of England Chief Andrew Bailey expressed concern about El Salvador embracing cryptocurrency, claiming that it would have an adverse effect on the country’s economy.

“It concerns me that a country would choose it as its national currency,” Mr Bailey said at the Cambridge University students union in November. “What would worry me most of all is: do the citizens of El Salvador understand the nature and volatility of the currency they have?”

President Bukele also faced criticism from the International Monetary Fund after becoming the first country in the world to introduce bitcoin as legal tender.

The IMF called for El Salvador to drop bitcoin as an official currency, citing risks regarding “financial stability, financial integrity, and consumer protection” due to the cryptocurrency’s price volatility.

El Salvador’s Treasury Minister, Alejandro Zelaya, dismissed the request, telling local media: “No international organisation is going to make us do anything, anything at all.”

Earlier this month, President Bukele announced his bid for reelection once his current term ends in 2024, despite laws prohibiting presidents from serving consecutive terms in office.

“Developed countries have reelection, and thanks to the new configuration of the democratic institution of our country, now El Salvador will too,” he said in an Independence Day live stream event.

Other prominent figures within the crypto space have also criticised the monetary policies of leading economies that have contributed to volatility and devaluing of fiat currencies.

Former MicroStrategy CEO Michael Saylor noted that the euro, pound and yen have all fallen by roughly 20 per cent against the dollar over the last year, while the dollar has fallen more than 60 per cent against the bitcoin over the last four years.