The IMF said the board of global lenders urged El Salvador to reduce the scope of bitcoin legislation by removing bitcoin legal tender status.
President Nayib Bukele pushed for the adoption of bitcoin as legal tender alongside the US dollar.
San Salvador, El Salvador: The International Monetary Fund wants El Salvador to abandon the highly volatile cryptocurrency bitcoin as legal tender and strictly regulate the electronic wallet that the government has pushed for nationwide adoption.
The IMF said in a statement on Tuesday that the board of global lenders urged authorities to reduce the scope of bitcoin law by removing bitcoin legal tender status.
The IMF statement said the adoption of cryptocurrency as legal tender poses major risks to financial and market integrity, financial stability and consumer protection.
President Nayib Bukele pushed for the adoption of bitcoin as legal tender alongside the US dollar. El Salvador’s Legislative Assembly became the first in the country to do so in June.
After nearly doubling in value late last year, bitcoin has fallen and was down slightly on Tuesday, when Congress voted on June 9. The bitcoin law came into force in September.
From the start there was concern that digital currency created to be out of control of governments would attract criminal activity. When relatives living outside the country sent home remittances, Bukele promoted adoption for thousands of Salvadorians to avoid money transfer fees.
El Salvador law called for all businesses with the technical ability to accept bitcoin as a form of payment. The rollout was messy, but it seems to have gone smoothly.
Bukele became a darling of cryptocurrency promoters and has since talked about building a bitcoin city and issuing bitcoin-backed bonds, something that and some IMF directors expressed concern.
The Buchels office said it did not immediately comment on the IMF’s statement.
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