IMF again criticized the legalization of bitcoin in El Salvador

In the report "El Salvador: Final Statement of the 2021 Article IV Mission Staff," the IMF praisedEl Salvador's efforts to stimulate “financial inclusion and growth,” but criticized the instrument that the country's government uses to achieve this goal.

In a recent report, the IMF praised howEl Salvador handled the COVID-19 situation – 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, itsnational application threatens increased risk to consumers, financial integrity and stability ... The IMF recommends limiting the Bitcoin legalization law and strengthening regulation and oversight of the new payments ecosystem.

IMF praises El Salvador's efforts to expandaccess of the population to financial services, but immediately recommends taking measures that keep 70% of the population from accessing the financial system, and close the state bitcoin trust.

Recently announced plans for useproceeds from the issuance of sovereign bonds for investing in bitcoin will require a very careful analysis of the implications and potential risks to financial stability.

President Naib Bukele immediately reacted to the criticism of the IMF and said he did not agree with their conclusions.

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