(InformingNews.com) – In September 2021, El Salvador took a progressive step toward altering its economy by making bitcoin legal tender. The country was the first in the world, outside the United States, to make cryptocurrency a legal tender. But now, an international body is telling the nation’s leaders they should reconsider this decision.
On January 25, an International Monetary Fund (IMF) report urged El Salvador to stop using bitcoin as a legal currency. The IMF warned the nation of liabilities associated with its use, and stated that El Salvador cannot offer sufficient protection to consumers who use it.
IMF urges El Salvador to drop bitcoin as legal tender, cites large risks https://t.co/3UMrtl8S4B pic.twitter.com/8GJz7d8Qyy
— New York Post (@nypost) January 26, 2022
El Salvador’s President Nayib Bukele has led the cryptocurrency move, investing in more bitcoin and working with a digital assets infrastructure company. Bukele also set a goal of raising $1 billion in its partnership with the company. The government has created Chivo, a virtual wallet, to help citizens use the currency.
In the report, the organization pleaded with Salvadoran officials to institute more oversight and regulation over the system if they plan to continue using it–which is a request entirely divergent with founding principles of the currency that state bitcoin is “decentralized and unregulated.”
Whether El Salvador takes the advice of the International Monetary Fund or not may have a significant impact on cryptocurrencies. If you happen to be invested in any cryptocurrency, keep your eyes on El Salvador.
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