International Monetary Fund (IMF), El Salvador Bitcoin (BTC) He said the risks of its adoption “have not yet emerged”, primarily thanks to its “limited” use, but caution should be exercised.
IMF Crashes Call on El Salvador Government to Review Expansion Plans on Bitcoin
“Given the legal risks, financial fragility, and the largely speculative nature of crypto markets, authorities should reconsider the government’s plans to expand its exposure to Bitcoin,” the IMF said in a statement on Friday.
These words came after the IMF’s annual visit to El Salvador, the United Nations’ financial institution, and the Central American nation’s $600 million bond payment last month.
To the disappointment of the IMF, El Salvador made BTC the official currency in September 2021, and the country’s president, Nayib Bukele, has been a strong proponent of Bitcoin on Twitter. Still, Bukele’s move didn’t quite pay off, as financial losses in the country’s BTC investments are currently estimated to be at least 50%.
Due to El Salvador’s opaque acquisitions and assets, the exact investment figures are unknown. “More transparency regarding the government’s BTC transactions and the financial situation of the state-owned BTC wallet (Chivo) is essential,” the IMF said.
The IMF said that while BTC investments have yet to pay off, El Salvador’s economy is experiencing a “full recovery” to pre-pandemic levels thanks to “the government’s effective response to the health crisis.”
The IMF has previously harshly criticized El Salvador’s Bitcoin move.
*Not investment advice.
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