- IMF asked El Salvador to narrow its scope of Bitcoin-tied laws.
- The UN agency is currently in talk with El Salvdor officials over Bitcoin.
- El Salvador has 5,748.8 bitcoins worth $352 million at press time.
The International Monetary Fund (IMF) has asked the *Government of El Salvador to reduce the country’s exposure to Bitcoin (BTC), citing concerns about the nation’s Bitcoin legislation and widespread use of the cryptocurrency.
Julie Kozack, the IMF’s director of communications, stated in a press briefing on Thursday that the organization is in talks with representatives of El Salvador, expressing disapproval of the nation’s Bitcoin strategies and highlighting the risks associated with Bitcoin. She said:
“What we have recommended is a narrowing of the scope of the bitcoin law, strengthening the regulatory framework and oversight of the bitcoin ecosystem, and limiting public sector exposure to bitcoin.”
Kozack added that the IMF is working towards an agreement with El Salvador to introduce a new IMF-supported program to “help with macroeconomic stabilization and adjustment and also growth-enhancing reforms.”
In August, the IMF announced that the program aimed to introduce policies to “boost bank reserve buffers, improve governance and transparency, and reduce the risks from Bitcoin.”
El Salvador and IMF’s Concerns
El Salvador became the first country to adopt Bitcoin as legal tender in 2021 and has developed into a Bitcoin-based economy with the government led by President Nayib Bukele, who promised to add one BTC each day to the country’s balance sheet. The IMF has expressed concerns about these Bitcoin adoption initiatives.
Read also: Argentina Looks to El Salvador’s Bitcoin Policy for Insight
The IMF stated in August that there are significant risks to Bitcoin adoption, adding that while the risks have not yet materialized, it is necessary to “enhance transparency and reduce potential fiscal and financial stability risks.” The organization stressed the need for immediate discussions “on this and other key areas.”
According to the data from Bitbo, as of October 17th, El Salvador holds 5,748.8 bitcoins. With the price of 1 BTC at $61,377 at the time of writing, the Central American country owns $352 million in Bitcoin.
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