IMF warns of problems over bitcoin adoption in El Salvador

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The IMF warns that Crypto can pose significant risks, claiming to be closely following the events of making Bitcoin adoption a legal tender, that is taking place in El Salvador, and it is potentially damaging negotiations.

“The adoption of bitcoin as legal tender raises several macroeconomic, financial, and legal problems,” said Gerry Rice, spokesman for the International Monetary Fund (IMF). He referred to the law recently approved in El Salvador, which recognizes the first cryptocurrency as legal tender in that nation.

The official expressed himself in this way today, June 10, during a press conference, according to the Reuters Agency report.

“We are closely monitoring developments and will continue our consultation with the authorities,” he added.

Gerry Rice, spokesman for the International Monetary Fund (IMF).

For the spokesperson of the financial body, “crypto-assets can pose significant risks and effective regulatory measures are very important when it comes to them.” Additionally, Rice said that the IMF will meet with Bukele to discuss the bitcoin (BTC) law.

In similar terms, Alina Carare, the IMF’s chief of mission for El Salvador, according to Reuters, expressed herself last Monday. She assured that the Fund is “following the news and will have more information as they continue their consultations with the authorities.”

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The Bitcoin law was enacted while El Salvador is in negotiations with the IMF in pursuit of a nearly $ 1 billion program.

The IMF warns that Crypto can pose significant risks, claiming to be closely following the events of making Bitcoin adoption a legal tender, that is taking place in El Salvador, and it is potentially damaging negotiations.

There are those who fear that the decision to give legal tender to bitcoin could damage the dialogue. For example, Donato Guarino, an executive at Citibank in that nation, wrote a note to the bank’s clients in which he says: “We see the holders of bitcoins in El Salvador as noise that could complicate discussions with the IMF.”

Also, as this medium published, according to some analyzes, the decision could affect El Salvador’s international relations. So believes analyst Vlad Costea, for whom this is “an experiment that will end badly.”

According to a certain sector of the Salvadoran press, opposed to the management of President Bukele, the recognition of BTC as legal tender could harm the relationship with the United States: “It is extremely unlikely that the administration of Joe Biden (who was already dissatisfied with the government of El Salvador) ignores the fact that a Latin American country, which has a lot of debt, starts using the US dollar less than before.

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Jack Mallers on Twitter, posted that if IMF is restricting basic human freedom, they are the criminals and not the ones who are fighting for it.

IMF: regulate bitcoin with international cooperation

It is not the first time that the International Monetary Fund has ruled on the cryptocurrency devised by Satoshi Nakamoto. In 2018, the Washington-based entity had indicated that, in its view, cryptocurrencies can play an important role in the international economy: 

“They can completely change the way we sell, buy, save, invest and pay our accounts ».

IMF in Washington, USA

Gita Gopinath, the IMF’s chief economist, ruled out just two months ago that BTC could be competition for legal tender. His words appear to have been refuted by El Salvador’s recent decision.

«To be a legal currency you need to have a stable value. So I would say that many of the cryptocurrencies out there cannot even be included within the definition of money. Cryptocurrencies are highly speculative investment assets and that’s okay »

Gita Gopinath, Chief Economist, International Monetary Fund, April 2021.

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Bruno Marques

Hi! I am the CEO/Founder of Crypto DeFinance, and I am an Enthusiast crypto investor. I started this project so we can provide you with carefully curated news. If you like us and our news, share the posts and comment. Your visit and interaction is very important to us.
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