Tuesday, February 27

The IMF urges El Salvador to eliminate Bitcoin as legal tender

The directory of The International Monetary Fund urged El Salvador on Tuesday to strip Bitcoin of its legal currency status in the country due to its high risks, highlighting a major obstacle to the nation’s efforts to obtain a loan from the institution.

Through a statement, the IMF to the authorities of the Central American country “to reduce the scope of Bitcoin law by removing Bitcoin’s legal tender status.” The executive directors of the IMF, who represent the 190 member countries of the fund, highlighted the risks of Bitcoin for “financial stability, financial integrity and consumer protection” and contingent tax liabilities. Some directors also expressed their concern about the risks associated with issuing Bitcoin-backed bonds.

In addition, in the statement, the Fund referred to the Chivo electronic wallet: “The directors agreed on the importance of promoting financial inclusion and pointed out that digital means of payment -such as the Chivo electronic wallet- could play this role”, concludes the IMF report. However, they stressed the need for strict regulation and supervision of the new Chivo and Bitcoin ecosystem.

The Savior. who last year applied for a $1.3 billion loan to the IMF, has been adamant about integrating bitcoin (BTC) into its economy, with its president Nayib Bukele revealing a volcanic-powered bitcoin mining operation in late September. This month, Bukele explained that El Salvador was making investments to boost the country’s geothermal energy production.

 

Keep reading:

► Argentine crypto platform gets USD 50 million in funding round

► Cryptocurrencies and the El Salvador effect in Latin America

► Legalization of BTC in El Salvador: how it will impact the rest of Latin America

 

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