Central Banks Wrestle With the Crypto Conundrum

When visiting El Salvador, be sure to bring sunscreen, a long-lens camera to memorialize its bountiful biodiversity and … Bitcoin. But have some U.S. dollars on hand just in case local merchants don’t accept it.

On this week’s episode, we dive into the disparate ways in which global leaders approach digital currencies, from the Salvadoran embrace to the tentative exploration by central banks. Tiny El Salvador, population 6.5 million, was the first country to make Bitcoin legal tender, providing a test case for its widespread use. Bloomberg reporter Michael McDonald filed a dispatch from the Central American nation after testing Bitcoin at various restaurants, rental car agencies and street vendors. While some transactions went through just fine, McDonald reports, many Salvadoran merchants have sworn off crypto and are sticking with the country’s other legal tender, the U.S. greenback.

Elsewhere, Stephanie finds central bankers and economists to be more circumspect about whether and how to create central bank digital currencies. Such crypto would be regulated by a country’s central bank and theoretically offer price stability. In a discussion sponsored by the Bank for International Settlements, a central banker from Sweden, the chief executive of Santander Bank and a Yale University finance professor weigh in on how to protect consumers while exploring this alternative form of payment.

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