The International Monetary Fund unsurprisingly thinks that El Salvador’s bold financial strategy to adopt Bitcoin as legal tender is a poor decision. Covered: IMF Doesn’t Like Bitcoin In El Salvador Other Bitcoin Efforts In The Country #Bitcoin >> IMF & World Bank pic.twitter.com/yHkCVqlv7Y — ???? Deep?lueCrypto ???? (@DeepBlueCrypto) November 23, 2021 Bitcoin is unironically rallying […] The post IMF Warns El Salvador Against Using Bitcoin As Legal Tender appeared first on CryptosRus.

IMF Warns El Salvador Against Using Bitcoin As Legal Tender

The International Monetary Fund unsurprisingly thinks that El Salvador’s bold financial strategy to adopt Bitcoin as legal tender is a poor decision.

Covered:

  • IMF Doesn’t Like Bitcoin In El Salvador
  • Other Bitcoin Efforts In The Country

Bitcoin is unironically rallying off some of the FUD (fear, uncertainty, doubt) that was spread by the International Monetary Fund (IMF) today. After dropping to a low of around $55,700, Bitcoin (BTC) has sprung back off support and is currently trading at $57,603.

RECOMMENDED: BITCOIN AND THE IMF: A NEVER-ENDING STORY

IMF Doesn’t Like Bitcoin In El Salvador

In not-so-groundbreaking news, the IMF has come out against El Salvador’s most recent move to create a Bitcoin city just a day after the announcement. In a statement published on Monday, the IMF says that Bitcoin has “significant risks” for consumer protection, financial integrity and financial stability.

“Given Bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, Bitcoin should not be used as a legal tender.”

They think that the country’s Chivo Bitcoin wallet needs much greater safeguards put in place for consumer protection.

“Staff recommends narrowing the scope of the Bitcoin law and urges strengthening the regulation and supervision of the new payment ecosystem. Like for other e-wallets, Chivo should be required to fully safeguard customers’ funds, both in U.S. dollars and Bitcoin, by segregating and ring-fencing reserve assets. Stronger regulation and oversight of the new payment ecosystem should be immediately implemented for consumer protection, anti-money laundering and counter financing of terrorism (AML/CFT), and risk management.”

Despite pointing out these risks, the IMF also makes sure to recognize that it sees the benefits that crypto can bring to consumers, saying that “crypto-technologies and digital payment systems like Chivo have the potential to make payments more efficient, thereby enhancing financial inclusion and supporting growth.”

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Other Bitcoin Efforts In El Salvador

As I already mentioned, El Salvador announced last week that the country plans on building its very own “Bitcoin city” that will be entirely taxless for its population. Rather than paying taxes like income and property taxes, the Bitcoin city will have a sales tax applied to all transactions.

This move is what instigated the kneejerk reaction from the IMF to call for greater Bitcoin and crypto regulation in the country.

Back in June, El Salvador took the crypto community by storm when the country’s president Nayib Bukele decided to adopt Bitcoin as legal tender. Ever since Bitcoin entered the streets of El Salvador, the country continues to innovate and create new ways of harnessing the potential of Bitcoin – including mining Bitcoin with geothermal energy.

 

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