IMF calls for El Salvador to stop using BTC as a legal tender- again and this is the third time that the organization warned the country because it thinks Bitcoin is a bad idea so let’s read further in our latest bitcoin news.
The IMF calls for El Salvador to stop using Bitcoin as a legal tender and it is spending even more time looking at the country and its crypto endeavors. The International Monetary Fund monitors the global economic system and distributes loans and aid to 190-dues paying member countries but now it stepped up the calls for El Salvador to abandon BTC. As a part of the regular meetings between the IMF and the member countries, the organization collects data and reports back to the board that it discusses problem areas and potential solutions with the country’s government.
Should I quit my job at McDonald’s and open a #Bitcoin Burger joint?
— Nayib Bukele 🇸🇻 (@nayibbukele) January 24, 2022
However, the IMF thinks Bitcoin is a problem for El Salvador. According to the remarks that the organization made, the country’s economy is shrinking while the public debt is expanding. It argues that using BTC as a national currency risk halting the recovery of the nation:
“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.”
The IMF objection goes back to June after El Salvador’s president Nayib Bukele announced that he will propose a law that will require citizens and businesses to accept BTC as payment unless they lack internet access to do so. The country was exclusively using US dollars as its currency since 2001. the IMF spokesperson said the country wasn’t ready and said:
“Crypto assets can pose significant risks and effective regulatory measures are very important when dealing with them.”
The legislative assembly passed the bill into law and three months later El Salvador became the first country to use BTC as an official currency. The IMF urged El Salvador to drop Bitcoin as a legal tender in November because of high price volatility. This has come into play as Bukele added 1800 BTC to the country’s treasury and purchased 410 more a few days ago when the market tanked. The price of BTC has shifted from the low $50K to $60,000 and back to $40,000. El Salvador is sitting on $12 million in unrealized losses.
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