The International Monetary Fund (IMF) has warned El Salvador – the only country to have adopted bitcoin as legal tender – of the risks it faces should its reliance on the cryptocurrency deepen.
Bitcoin “continues to pose underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection” in El Salvador, IMF experts wrote in a report released at the end of the week.
“Given the legal risks, the fiscal fragility and the mainly speculative nature of the crypto markets, the Salvadoran authorities should abandon their plans to extend government exposure to bitcoin”, recommends the IMF which calls on the government to “more transparency about his bitcoin transactions and the financial health of his cryptocurrency portfolio.
The President of El Salvador Nayib Bukele decided, in September 2021, to make El Salvador the first country to adopt bitcoin as its official currency in addition to the US dollar. The IMF and World Bank warned at the time that this could make the country more vulnerable to money laundering and other illicit activities that could destabilize the economy.
The International Monetary Fund (IMF) has warned El Salvador – the only country to adopt bitcoin as legal tender – of the risks it faces should its dependence on the cryptocurrency deepen. underlying risks to financial integrity and stability, fiscal sustainability and…