December 8, 2023

The IMF called on El Salvador to deprive bitcoin of the status of a means of payment

The International Monetary Fund pointed out the need for strict regulation and supervision in relation toChiva e-wallet ecosystem and the first cryptocurrency.


The International Monetary Fund (IMF) urged the authoritiesEl Salvador to cancel the decision to recognize bitcoin as an official means of payment, which has been in force since September 2021. Representatives of the IMF held consultations with the authorities of the country regarding the economic situation in it, the organization said in a statement.

“There are major risks to the financialstability, financial integrity and consumer protection associated with the use of bitcoin,” said members of the Fund’s Executive Board.

They pointed out that El Salvador was fastrecovering from the damage caused by the pandemic, and digital payment and e-wallet have promoted financial inclusion. At the same time, the IMF expressed concern about the risks associated with the country's plans to issue $1 billion worth of Bitcoin-backed bonds.

January 22 President Nayib Bukele of El Salvadorannounced the purchase by the authorities of 410 bitcoins in the amount of $15 million. At the moment, the country's authorities hold 1.69 thousand BTC with a total value of $63.2 million, according to Bitcoin Treasuries.

Last November, Bukele reported that inEl Salvador will build a city dedicated to Bitcoin called "Bitcoin City". According to the President, the city will have a rounded shape, and in its center there will be an exhibition complex in the form of a giant "B" symbol. Residents of "Bitcoin City" will be exempt from paying all taxes (on income, property, capital gains, etc.), except for VAT. Also, the new city will use exclusively renewable geothermal energy sources. To finance the construction of "Bitcoin City", the authorities of El Salvador will issue tokenized 10-year bonds worth $1 billion.

El Salvador is the first country in the world where bitcoinreceived the status of legal tender (on a par with the US dollar). On September 7, the corresponding law came into force in the country. On the same day, the authorities bought the first 550 bitcoins.