- El Salvador's move to adopt bitcoin is unlikely to find many imitators, Mark Mobius said in an interview with Bloomberg.
- "It just doesn't make sense to have a payments system with bitcoin when you can use [your] phone to make payments," said Mobius.
- Salvadoran president Nayib Bukele has said that bitcoin will help slash the cost of remittances.
- See more stories on Insider's business page.
El Salvador's daring move to adopt bitcoin is unlikely to find many imitators, emerging markets veteran Mark Mobius said in an interview with Bloomberg.
As El Salvador begins its nationwide bitcoin adoption on Tuesday, the Mobius Capital Partners co-founder said the move exposed bitcoin's shortcomings as a payment mechanism, throttling the likelihood of broader adoption.
"It just doesn't make sense to have a payments system with bitcoin when you can use [your] phone to make payments," said Mobius, who pioneered the world's first emerging-markets fund at Franklin Templeton Investments. "You don't need bitcoin, you don't need cryptocurrency."
Salvadoran president Nayib Bukele has said that bitcoin will help slash the cost of remittances, which made up a quarter of the country's GDP in 2020.
But others fear adopting the volatile cryptocurrency as legal tender will imperil crucial financial-assistance talks with the IMF and destabilize the country's already weak economic fundamentals.
"El Salvador, let's face it, is on its back. It's got real problems. It's a bankrupt country," Mobius told Bloomberg. "They're grasping at straws with bitcoin."
He added that a few other countries with weak financial systems, such as Cuba, could adopt bitcoin, but otherwise, he doesn't expect widespread adoption elsewhere.
Asked what could change his calculus, Mobius said the American government allowing taxes to be paid in bitcoin could make it an internationally recognized currency and catapult crypto into the mainstream.
"But as it stands I don't see that happening anytime soon," he said.
Bukele is shrugging off criticism from international investors like Mobius, doubling down on his bet with a government purchase of 400 bitcoin on Monday - worth around $20 million at current prices.