Steve Hanke, a professor of applied economics at John Hopkins University, says that El Salvador’s adoption of Bitcoin as a legal tender places the country at risk of sanctions.
Hanke, who is also the director of the Troubled Currencies Project at the Cato Institute in Washington D.C., says that the step El Salvador has taken to embrace the world’s leading cryptocurrency will get the country flagged for violating the standards of the Financial Action Task Force, a body formed by the Group of Seven (G7) countries with the mandate of combating money laundering and terrorism financing. According to Hanke, this could result in sanctions.
“Once the flag comes … then you get into sanctions. And we don’t know what the sanctions would be. But there might be sanctions.
The flagging and the sanctions per se… it essentially restricts financial activity in financial transactions and it can go from light squeeze to a hard squeeze.”
The applied economist explains