New York, Monday, October 14, 2024 – The International Monetary Fund (IMF) has urged El Salvador to reform its Bitcoin (BTC) regulations, which currently recognize the cryptocurrency as legal tender. During a press briefing, IMF spokesperson Julie Kozack stated that the agency is engaged in ongoing discussions with El Salvador regarding policies aimed at enhancing productivity and economic governance.
Kozack emphasized that addressing the risks associated with Bitcoin is a crucial aspect of these discussions. “The goal is for the Fund to support a credible and well-sequenced policy package designed by the authorities,” she said.
The IMF’s recommendations include narrowing the scope of El Salvador’s Bitcoin law, strengthening regulatory frameworks, and limiting public sector exposure to the cryptocurrency. This move comes as El Salvador became the first nation globally to adopt Bitcoin as legal tender in 2021. Earlier this year, President Nayib Bukele announced plans for the country to continue accumulating one Bitcoin per day.
This guidance from the IMF highlights the growing concerns about the implications of widespread Bitcoin adoption on the country’s economy and public finances. As El Salvador navigates its unique position in the cryptocurrency landscape, the IMF’s advice underscores the importance of robust regulatory measures to mitigate potential risks associated with digital currencies.
