IMF recommends El Salvador again to stop considering Bitcoin as legal tender
The International Monetary Fund, better known by its acronym as the IMF, once again said that the government of El Salvador should reverse its decision to grant status to Bitcoin as legal tender in the country, once again highlighting the risks associated with the use of the cryptocurrency.
The recommendation came to fruition in a new report published today through its website, where the board of directors held conversations with representatives from El Salvador to speak fairly on the subject.
The report published by the IMF reads:
“Since September 2021, the government has adopted Bitcoin as legal tender. The adoption of a cryptocurrency as legal tender, however, entails large risks for financial and market integrity, financial stability, and consumer protection. It also can create contingent liabilities. ”
Among the remarks made by the board of directors, the concern about the Bitcoin-backed bonds that the government plans to launch stands out, which they see as a risky bet precisely because of the volatility that the digital currency faces.
Although the IMF recognizes El Salvador’s efforts in economic matters and the emphasis with which they have addressed the COVID-19 pandemic, the financial institution’s comments add to the position it has been maintaining since last year, in which qualifies as a very bad decision to make Bitcoin a legal tender.
This was previously indicated in a report published in November of last year, where it emphatically stated that Bitcoin should not be used as legal tender in El Salvador, inviting the country to strengthen aspects associated with the regulation and supervision of digital currency.
In this same way, the IMF also invited other countries not to follow the example of El Salvador, warning about the possible consequences of going down that path.
Let us keep in mind that El Salvador has gone ahead with great plans for Bitcoin after the adoption of the digital currency. These include the intention to finance the construction of a new city called Bitcoin City, the launch of bonds based on the digital currency and the purchase of BTC to save as a reserve.
In addition, the country’s authorities are also advancing plans to carry out crypto mining activities powered by geothermal energy, which is completely renewable and conforms to the new standards that the industry is seeking.