InstaForex

November 23, 2021

IMF Reveals 'Bad' Report on El Salvador, All Because of Bitcoin (BTC)

 El Salvador faces praise and criticism.


In its latest report the International Monetary Fund (IMF) has praised how El Salvador handled the COVID-19 outbreak case as well as impressed with the country’s economic growth of 10% over 2021.


In fact, the global organization also supports El Salvador's efforts to fight crime.


But the IMF has not hesitated to criticize the outcome of the acceptance of Bitcoin (BTC) as a legal tender in the country since September.


Bitcoin = risk


From the very beginning, the IMF has emphasized the risks that Bitcoin brings into the economy of El Salvador.



As a legitimate tender, these assets carry risks to consumer protection, financial integrity, and financial stability.


Its use also increases contingent fiscal liabilities and therefore Bitcoin should not be accepted as a legal tender.


As a result, the IMF proposed to narrow the scope of the Bitcoin Law and called for the strengthening of legislation and supervision of the new payment ecosystem.


El Salvador -US Relations Dependent


The representative of the diplomat, Jean Manes in the media recently revealed that the relationship between the two countries is in a ‘suspended’ status because El Salvador is no longer showing interest.


Clearly, the White House had offered cooperation and the El Salvador government decided not to accept it.