The International Monetary Fund (IMF) has again called on El Salvador to give up Bitcoin. The IMF thinks Bitcoin is a problem for El Salvador. Here are the details.
The international organization published a report today after bilateral talks with El Salvador. According to the statements, while the economy of the Central American country is shrinking, public debt is increasing. The IMF argued that using Bitcoin as a national currency, as it has done since September 2021, risks stalling the recovery. According to the IMF, adopting Bitcoin as a national currency poses great risks to financial stability, financial integrity and consumer protection.
The IMF’s objection actually goes back to June. El Salvador has only used the US dollar as its currency since 2001, and around the same time last June, El Salvador’s president announced plans to make Bitcoin the national currency of his country. Following this statement, an IMF spokesperson said, implying that the country is not ready, “Crypto-assets can pose significant risks and effective regulatory measures are crucial when dealing with them.” had warned. Ultimately, the country’s Legislature quickly passed the bill, and in September, El Salvador became the first country in the world to use BTC as its official currency.
Also last November, the IMF urged El Salvador to abandon Bitcoin as its national currency, citing high price volatility. A new warning may have come as Bukele added nearly 1,800 BTC to the country’s treasury, or even bought another 410 BTC yesterday as the market dropped. It is worth noting that between September and today, the price of Bitcoin rose from $50k to a record $69k and fell back below $40,000.