Bitcoin as legal tender can expose El Salvador to Zimbabwe-like risks

Policy decisions may or may not be productive. In worst cases, they can be counter-productive. Banking system is the backbone of any economy, and there is a reason behind it. Money supply in the market is managed by banks that engage in safekeeping of depositors’ money and lending a portion of it to others. The central bank oversees the functioning of banks, prints currency notes, drafts monetary policy, and all these actions infuse stability in the country’s financial system. Central banks manage interest rates and tweak them to either infuse liquidity in a slowing economy or suck liquidity to control… [Continue Reading]