Veteran investor Mark Mobius says El Salvador’s move to adopt Bitcoin as legal tender is unlikely to set off a rush among other countries to follow suit.
The co-founder at Mobius Capital Partners, who spent more than three decades at Franklin Templeton Investments, told Bloomberg TV that few if any other nations are likely to embrace Bitcoin as legal tender, calling the largest digital coin inconvenient and risky.
“Maybe a few other countries with financial problems will adopt it,” said Mobius, naming Cuba as one example. “If governments — particularly the U.S. government — allow payment of taxes in Bitcoin or some other cryptocurrency, then I would change my mind, because then it would become an internationally recognized currency. But as it stands I don’t see that happening anytime soon.”
El Salvador, whose economy last year suffered its deepest crash in four decades, is bringing Bitcoin into circulation alongside the U.S. dollar from Tuesday, the first nation in the world to do so. The move is the brainchild of 40-year-old President Nayib Bukele, who says it will make the financial system more inclusive and lower the cost of sending remittances.
The country recently bought 400 Bitcoins as it prepares to adopt the cryptocurrency, Bukele said in a post on Twitter.
Mobius however said El Salvador is “grasping at straws with Bitcoin.” He called the Central American nation “a bankrupt country” with “real problems.”
The famed emerging-markets trader pointed to a payments system devised by Kenya’s Safaricom Plc, in which Mobius is an investor, as an example of a money transfer system that operates outside of cryptocurrencies.
“You don’t need Bitcoin,” said Mobius. “You can still have transfers without a bank account. This is where I think the whole system is going globally.”