After an official visit to El Salvador, the IMF issued a statement that the country’s authorities should reconsider their plans to expand government exposure to bitcoin.
Representatives of the International Monetary Fund (IMF) visited El Salvador from January 30 to February 8 for consultations, in accordance with Article IV of the fund’s charter, which provides for monitoring the state of the money market and economic stability of member countries.
At the end of the visit, the IMF issued a warning about the dangers of starting trading in bitcoin-backed bonds. According to the fund’s experts, El Salvador has not been able to overcome the negative consequences and potential risks associated with the adoption of bitcoin as legal tender.
Representatives of the IMF believe that El Salvador should refrain from trading in these bonds, since the proposal of a new debt financial instrument denominated in BTC in the long term may adversely affect the country’s underlying macroeconomic indicators.
Given the legal risks, fiscal volatility, and the largely speculative nature of cryptocurrency markets, IMF experts recommended that the El Salvadoran authorities reconsider their plans to expand government exposure to bitcoin, including by issuing tokenized bonds.
In El Salvador, the position of the IMF, like the position of critics of the adoption of bitcoin, is considered biased. El Salvador’s President Nayib Bukele said earlier that numerous foreign media outlets that were actively predicting the future bankruptcy had completely ignored his country’s financial success.
Source: Bits
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