Since 2021, the International Monetary Fund (IMF) has been urging El Salvador to rethink its Bitcoin legislation. Back then, El Salvador made history by making Bitcoin legal tender, which caught the world’s attention. However, the IMF has been pushing for stricter regulations since then, arguing that there are too many risks involved.
And now, once again, the IMF is warning that the El Salvadoran government should reduce its involvement with Bitcoin.
Bitcoin Risks and IMF Warning
On Thursday, the IMF released a new report advising El Salvador to tighten its control over Bitcoin and minimize risks to the government. During a press conference, an IMF spokesperson suggested that El Salvador should reduce the public sector’s exposure to the unpredictable nature of Bitcoin.
In simple terms, the IMF is saying that the government should invest less in Bitcoin or rely on it less for the country’s financial planning. The idea is to prevent unnecessary risks due to Bitcoin’s price swings, which we all know can be quite dramatic.
Concerns Over Economic Stability
This isn’t the first time we’ve heard this warning. The IMF has been repeating the same concerns for years. Back in August, they raised alarm bells over the potential risk Bitcoin could pose to El Salvador’s financial stability. They even stated that while these risks haven’t fully played out yet, the government needs to increase transparency and work to limit any potential dangers.
Since November 2021—shortly after Bitcoin became legal tender in El Salvador—the IMF has made it clear that they don’t see Bitcoin as suitable for official currency status. And they didn’t stop there. In January 2022, they once again called for a rethink.
President Bukele: Bitcoin Adoption Could Be Faster
Despite the IMF’s ongoing pressure, President Nayib Bukele remains committed to Bitcoin. El Salvador was the first country in the world to officially adopt Bitcoin as legal tender, and the country now holds 5,892 Bitcoin, which is worth roughly $345 million at the current market rate. Bukele, who was the driving force behind this pioneering move, believes that the plan has brought positive results. However, he admits that Bitcoin adoption has been slower than they initially hoped.
On a positive note, the IMF did praise Bukele’s budget for 2025. According to their assessment, if things go as planned, El Salvador could be debt-free by that time. That’s a silver lining amid all the IMF’s criticisms.
Keep following us at HowToBuyBitcoin.org for the latest news on Bitcoin adoption around the globe.