The International Monetary Fund (IMF) is once again urging El Salvador to drop Bitcoin (BTC) from the country’s economy.
It is understood that the economic situation in El Salvador is increasingly worrying and needs some correction to restore the situation.
The IMF believes this ‘damage’ stems from Bitcoin.
What happen?
In the latest report, El Salvador's economy showed a critical decline and at the same time the country's debt increased.
The IMF explained that the use of Bitcoin as El Salvador’s official currency since September 2021 has hampered the economic recovery: “Bitcoin poses a serious risk to market integrity, financial stability, and consumer protection. In fact, the receipt of these assets also creates contingent liabilities. ”
Timeline of IMF opposition to El Salvador’s decision
The IMF rejected El Salvador’s decision as soon as its president, Nayib Bukele announced the Bitcoin Law bill in June 2021.
At the time, Bukele urged the entire population of the country to accept BTC as a medium of payment, except those in areas with difficulty accessing the internet.
The IMF argues that crypto assets further expose the country to significant risks and a strict legal approach is needed if the decision is to proceed.
Three months later, the BTC legally became the official currency of El Salvador after the Legislature passed the Bitcoin Law.
What can be done, it's too late. In November, the IMF once again urged El Salvador to give up on Bitcoin on the grounds that the crypto market is highly volatile.
But Bukele was adamant and until yesterday, still took the opportunity to add BTC and bring the country's savings assets to 1,801 BTC ($ 66,629,959, equivalent to RM278,891,404).
At the time of writing, BTC is trading at $ 36,996, up over 2% in 24 hours.
