In Brief:
- IMF urged El Salvador to remove Bitcoin as legal tender due to risk linked with Bitcoin.
- Board members also cited risk factors involved in the Bitcoin-Bonds.
- El Salvador’s loan application was resisted by the institution.
The International Monetary Fund (IMF) advised El Salvador to remove the tag of legal tender from Bitcoin and considered it to be a major obstacle to getting a loan from the financial institution.
Last year, El Salvador became the first country to accept Bitcoin as a legal currency along with USD. After that many countries were inclined towards cryptocurrency adoption.
In response, Nayib Bukele has mocked the IMF in a tweet with a cartoon GIF, written in “I see you, IMF. That’s very nice”.
El Salvador also applied for an IMF loan of $1.3 billion, but the institution has refused to give a loan due to Bitcoin concerns.
IMF’s executive directors and representatives of 190 member nations stated by citing risk factors involved in Bitcoin for “financial stability, financial integrity, and consumer protection”. Also, the IMF requested the authorities “to narrow the scope of the Bitcoin law by removing Bitcoin’s legal tender status.”
While attending the board’s discussion of the Central American nation’s annual Article IV economic evaluation, directors have also highlighted the risk linked with Bitcoin-backed bonds.
El Salvador’s crypto enthusiastic president, Nayib Bukele has started to grow Bitcoin stake through buying the dip at $50,000. With the initial buying, El Salvador is currently holding up 1,801 Bitcoins with the recent purchase of 410 Bitcoins amid Market Dip. But unfortunately, it fell by 45% after embarking on a new peak of $68,000, resulting in a $20 million loss.
