The International Monetary Fund (IMF) has once again called on El Salvador to strengthen its regulatory framework and oversight of the Bitcoin ecosystem and recommended that the country narrow the scope of its Bitcoin law.
IMF Urges El Salvador to Strengthen Bitcoin Regulation and Oversight
According to Reuters, at a press conference, IMF spokesperson Julie Kozack stressed that El Salvador should limit its public sector exposure to Bitcoin.
This is not the first time the IMF has expressed concerns about El Salvador's Bitcoin policy.
In August, the IMF issued a similar warning, saying that while many of the risks associated with the country adopting Bitcoin as legal tender have yet to materialize, more efforts are needed to increase transparency and address potential fiscal and financial stability risks.
The IMF also called for additional discussions on key areas related to Bitcoin surveillance.
The IMF's concerns date back to November 2021, just two months after El Salvador became the first country in the world to establish bitcoin as legal tender.
At the time, the IMF recommended that bitcoin not be used as a legal tender and called for stronger regulation and oversight of the cryptocurrency ecosystem; it reiterated this recommendation in January 2022.
Since accepting Bitcoin in September 2021, El Salvador has accumulated approximately 5,892 BTC, worth approximately $345 million at current prices.
Despite this, the country’s Bitcoin project has faced challenges. President Nayib Bukele, who spearheaded the initiative, recently admitted that while the overall impact of the policy has been “net positive,” the level of Bitcoin adoption has not met his expectations.
*This is not investment advice.