International Monetary Fund urged El Salvador to abandon bitcoin

The agency has repeatedly offered to make such a decision, citing financial, economic, and legal problems

26.01.2022 - 12:05

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What’s new? The Board of Directors of the International Monetary Fund (IMF) has called on El Salvador to abandon bitcoin as a legal tender within the state. The IMF officials believe that the state-run Chivo e-wallet can increase financial accessibility, but recommend that it be kept strictly regulated.

Information on the IMF website

How did events develop? In September, El Salvador became the first country to make bitcoin a legal tender, alongside the US dollar. The IMF has repeatedly called for the move to be reversed, citing financial, economic, and legal problems. Some board members have expressed concern about the risks associated with El Salvador’s expected issuance of bitcoin-linked bonds.

What is El Salvador’s plan for cryptocurrency development? The country is preparing to issue $1 billion in bonds, half of which will be used to buy bitcoin. The government is betting that the opportunity to profit from bitcoin will attract investors. They will be able to get a dollar yield of 6,5%, much lower than the current size of El Salvador’s similar government debt, which is approaching 17%.

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