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October 5, 2022
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IMF wants El Salvador to no longer have Bitcoin as legal tender

For the International Monetary Fund (IMF), having Bitcoin as legal tender is a risk to the stability and financial system of El Salvador.

On Tuesday (25), the International Monetary Fund (IMF) recommended that El Salvador withdraw Bitcoin as legal tender. On a report issued by the IMF, the use of cryptocurrency in the country will affect growth and financial stability. The IMF statement came to light due to a negotiation that the country is doing with the organization, as El Salvador requested a loan of 1.3 billion.

The organization began to show its displeasure with El Salvador, since when the country took the decision to adopt Bitcoin as legal tender, in November the IMF had already gone public raising questions about the implications that El Salvador would have if it adopted Bitcoin.

Other points were highlighted in the report: the concern of the issuance of securities backed by cryptocurrency and the other point is that despite the IMF recognizing that the country has provided secure means to facilitate, boost transactions and financial inclusion (provision of the Chivo wallet), the country needs to implement strong regulation and supervision.

Nayib Bukele, President of El Salvador, has been a strong supporter of Bitcoin and is popularly known for leading the adoption of Bitcoin in the country. Bukele recently purchased 410 Bitcoins, bringing the total Bitcoin inventory to 1500 Bitcoin. The nation is also exploring Bitcoin-backed bonds and plans to issue them soon. The bonds issued will have a duration of ten years and will be denominated in US dollars.

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