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The International Monetary Fund (IMF) has once again urged El Salvador to strengthen its regulatory framework and oversight of the Bitcoin ecosystem. The organization recommended narrowing the scope of the country’s Bitcoin law to mitigate potential risks.
IMF Calls on El Salvador to Tighten Bitcoin Regulations and Oversight
During a press briefing, IMF spokesperson Julie Kozack emphasized that El Salvador should limit the public sector’s exposure to Bitcoin. This isn’t the first time the IMF has voiced concerns regarding El Salvador’s Bitcoin policy.
Back in August, the IMF issued a similar warning, noting that while the risks associated with the country’s adoption of Bitcoin as legal tender had not yet fully materialized, more efforts were needed to enhance transparency and address potential risks to financial and fiscal stability.
The IMF also called for further discussions on key areas related to Bitcoin oversight. These concerns date back to as early as November 2021, just two months after El Salvador became the first country in the world to adopt Bitcoin as legal tender.
At the time, the IMF advised against using Bitcoin as a legal currency and urged for stronger regulation and supervision of the cryptocurrency ecosystem. The organization reiterated this advice in January 2022.
Since adopting Bitcoin in September 2021, El Salvador has accumulated approximately 5,892 BTC, worth around $345 million at current prices. However, the country’s Bitcoin project has faced challenges. President Nayib Bukele recently acknowledged that while the overall impact of the policy has been “net positive,” the adoption levels of Bitcoin have not met his expectations.
