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The International Monetary Fund (IMF) recently urged the Salvadoran authorities to remove Bitcoin's legal tender status. They said it was a threat to market integrity, financial stability and consumer protection.
Criticize the Bitcoin Act.
The IMF publicly revealed its warning in a website statement earlier today, after concluding its Article IV consultation with El Salvador on Monday. Despite noting the country's rapid economic recovery from the pandemic, he has consistently cited Bitcoin's legal tender status as a "great risk" to the market that could create "contingent liabilities".
This is not the first criticism the IMF has made to the nation regarding this approach. In July, the organization said that making Bitcoin a national currency is a “step too far, citing price volatility and a lack of incentive for its use.
“A crypto-active might catch on as a vehicle for non-banked individuals to make payments. Not to store value," they said back then.
"It would be immediately redeemed in real money upon receipt." While recognizing El Salvador's chivo state wallet as a tool for financial inclusion, they were much more concerned about the Bitcoin ecosystem in which it participates.
"They urged the authorities to restrict the scope of the Bitcoin law by deleting Bitcoin as a legal course," reads the statement.
In addition, the IMF expressed concern over the "risks" associated with El Salvador's Bitcoin bonds. El Salvador is already moving forwards with economic plans centered around these bonds, used to buy Bitcoin and invest in infrastructure.
El Salvador is already moving forward with economic plans centered around these bonds, used to buy Bitcoin and invest in infrastructure.
President protected from criticism. He has historically done so with his critics over social media, including the Bank of England, whose “worry” he considers disingenuous.
Similarly, the president told Moody’s last week that he “DGAF” about their downgrading of El Salvador’s sovereign debt.
The IMF issued a similar criticism of the national debt in today's statement. The IMF issued a similar critique of the national debt in today's statement.
