In the report, El Salvador: 2021 Article IV Mission Staff Final Statement, the IMF praised El Salvador's efforts to promote "financial inclusion and growth" but criticized the tool the country's government is using to achieve this goal.
In a recent IMF report praised the way El Salvador handled the situation with COVID-19 - the country's economy grew by 10% in 2021. The International Monetary Fund also recognizes the El Salvador government's efforts to reduce crime, "develop the economy and improve financial inclusion." However, when it comes to Bitcoin, the IMF is harshly critical.
Given the high volatility of Bitcoin, its use at the government level poses increased risks to consumers, financial integrity and stability... The IMF recommends limiting the law on the legalization of Bitcoin, and strengthening regulation and oversight of the new payments ecosystem.
The IMF praises El Salvador's efforts to expand access to financial services, but immediately recommends taking measures that keep 70% of the population from accessing the financial system, and close the government's Bitcoin Trust.
Recently announced plans to use sovereign bond proceeds to invest in Bitcoin will require a very careful analysis of the implications and potential risks for the financial stability.
President Nayib Bukele immediately responded to the IMF's criticism and stated that he did not agree with their conclusions.
Subscribe to ForkNews on Telegram to stay up to date with news from the world of cryptocurrencies
You May Also Like
The US IRS is preparing to shake up crypto traders
Accounting firm NODE40, which specializes in calculating digital currency earnings and developer of Bitcoin tax reporting software, expects the U.S. Internal Revenue Service (IRS) to send out a record number of cryptocurrency-related claims as it believes many investors will decide to declare their losses.
The Japanese government has proposed changes to taxation
To encourage widespread adoption of cryptocurrencies in the country and reduce losses for investors, Takeshi Fujimaki, a spokesman for the opposition political party Nippon Ishin, recommended four amendments to the legislation.
