The global financial institution has warned El Salvador of major associated risks and requested the country to discontinue Bitcoin’s status as legal tender.
IMF Doesn’t Like BTC…STILL
A report was issued by the International Monetary Fund (IMF) executive board after the conclusion of bilateral discussions with El Salvador about its economy and negotiations for a $1.3 billion loan. According to the report, the committee’s directors stressed the large risks associated with the use of BTC in matters of financial stability, financial integrity, and consumer protection, as well as the risks associated with issuing BTC-backed bonds. The IMF directors also urged Salvadorean authorities to remove BTC’s legal tender status and limit the scope of the Bitcoin Law. The report also called for strict regulation and oversight of the crypto in the country, claiming risks of potential liabilities.
President Claps Back With Meme
El Salvador’s President Nayib Bukele has been quite bullish on Bitcoin from the start. As one of the major champions who brought about the Bitcoin Law, Bukele had an interesting response to the IMF’s warnings. On Tuesday, he took to his official Twitter handle and posted a GIF that featured Homer Simpson (labeled as the IMF) indulging in his usual iconic buffoonery. The GIF was captioned, “I see you, IMF. That’s very nice,” indicating that Bukele is not taking the IMF’s suggestions very seriously.
IMF’s Warnings Lack Perspective
The IMF has maintained a strong anti-BTC stance from the beginning. In early 2021, when the Bitcoin Law had just been passed in El Salvador, the IMF issued a similar warning of associated risks involved with a cryptocurrency as legal tender. Later in November, after concluding its 2021 Article IV mission to El Salvador, the IMF reiterated its rather antiquated concerns in a concluding statement. The IMF’s approach towards the BTC issue is entirely devoid of the nuances in the industry and is only focused on a laundry list of basic critiques intended to ignite FUD about the crypto. However, despite the multiple warnings from the IMF, El Salvador has powered through with its plans of incorporating Bitcoin into its economy.
In December 2021, Silvia Amaro for CNBC discussed several BTC-related key problems highlighted by the IMF. Besides a lack of strong operational governance, the IMF is also concerned about the growing proximity between social media influencers and crypto investments. It claims that the influencers who are paid to promote a token do not do due diligence to protect their followers from scam tokens. Thus it is an easy route taken by scammers to pump and dump.
