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Bitcoin: IMF corners El Salvador
By Daniele Corno
International Monetary Fund urges El Salvador to reduce Bitcoin use and increase oversight to mitigate financial risks
Limit laws on Bitcoin use
The International Monetary Fund (IMF) has called on El Salvador to reduce the use ofBitcoin and increase controls on the currency’s use within the country.
JUST IN: IMF urges El Salvador to limit the scope of #Bitcoin law 🇸🇻
They're terrified 🙌 pic.twitter.com/kwizik7b6D
— Bitcoin Magazine (@BitcoinMagazine) October 4, 2024
During a press conference, Julie Kozack, spokesperson for the IMF, explained that the government needs to pay attention to the risks related to Bitcoin.
According to the IMF, it is necessary for the public sector to limit the use of Bitcoin and for new rules to be introduced to better monitor the system. This could help improve the country’s economic stability and avoid future problems related to volatility risks.
The IMF is working with El Salvador to create an economic plan that mitigates all major related risks.
Risks and increasing regulatory pressures
In September 2021, El Salvador became the first country in the world to adopt BTC as legal tender. The country, over the course of these years has carried out a continuous accumulation of BTC as a reserve asset. It currently holds a countervalue of more than $450 million, guarding 5892 BTC. This figure is shared publicly HERE, where one can track the daily accumulation plan of the amount of 1 BTC.
However, from the beginning, the IMF has expressed many doubts about this choice. On several occasions, it suggested limiting the use of Bitcoin because it could cause fiscal and financial problems.
In January 2022, the Fund reiterated the need to improve laws and controls on BTC. Although President Nayib Bukele stated that the adoption of Bitcoin has brought many benefits, currently, use among Salvadoran citizens still remains very low.
