The International Monetary Fund (IMF) is worried about the impact that El Salvador’s new policy of adopting bitcoin as a legal currency would have on the global financial system. The Fund fears that further adoption of cryptocurrencies could undermine the control that the major central banks have over the global financial system.
On Tuesday, February 19, the Executive Board of the International Monetary Fund voted to restrict its financing of El Salvador because it is planning to make the digital money Bitcoin legal tender. Although the IMF has been working on the topic of crypto-currencies since 2014, the new policy represents a significant shift in the organization’s stance on the use of Bitcoin.
The IMF has issued a warning to El Salvador regarding its plans to make Bitcoin legal tender, stating that the country is “playing a very real risk” of nullifying its financial system by “waging a war” against the dollar.The International Monetary Fund (IMF) has warned of a number of macroeconomic, financial and legal problems associated with the introduction of bitcoin as legal tender in El Salvador. Crypto assets can pose significant risks and effective regulatory measures are key to addressing them, the IMF official warned.
IMF sees problems with bitcoin as legal tender in El Salvador
The International Monetary Fund (IMF) on Thursday raised a number of economic and legal concerns about the introduction of bitcoin as a legal currency in El Salvador, on par with the US dollar. With the recent passage of the bitcoin law proposed by President Nayib Bukele, El Salvador has become the first country in the world to accept bitcoin as legal tender. said Jerry Rice, an IMF official, at a scheduled press briefing in Washington: The introduction of bitcoin as legal tender raises a number of macroeconomic, financial and legal questions that need to be analyzed very carefully. We are therefore monitoring the situation closely and will continue to consult with the authorities. Crypto assets can pose significant risks, so it is vital that effective regulatory measures are taken to address them. The spokesman added that the IMF will meet with President Bukele later on Thursday to discuss the recently passed bitcoin law. El Salvador is negotiating with the IMF for a loan of about $1 billion. After passing a law recognizing bitcoin as legal tender, El Salvador has announced that it will mine bitcoin with energy from volcanoes. I just asked the president of La Geo (our state’s geothermal energy company) to develop a plan to create bitcoin mining capacity with very cheap, 100% clean, 100% renewable, emissions-free energy from our volcanoes. This will develop quickly, Bukele said. What do you think of the IMF’s concerns about bitcoin as legal tender in El Salvador? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.The IMF has weighed in on the situation in El Salvador, saying that it is concerned about the central bank’s decision to begin offering the local currency, the Colón, as an acceptable form of payment in the country. El Salvador’s central bank says it is trying to find a way to put the new law into practice while also safeguarding the country’s international reserves. However, the IMF has reminded its member states that any measure that would encourage a wider use of virtual currencies is unlikely to boost international financial stability.. Read more about bitcoin beach app and let us know what you think.
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