The International Monetary Fund (IMF) has advised El Salvador to limit its Bitcoin law and reduce public exposure to the crypto. During a press conference, IMF spokesperson Julie Kozack emphasized the need for a narrower scope of the Bitcoin law, enhanced regulatory frameworks, and oversight of the Bitcoin ecosystem.
This recommendation is part of ongoing discussions between the IMF and El Salvador, focusing on addressing the risks associated with Bitcoin.
El Salvador’s journey with Bitcoin began in 2021, when it became the first country to adopt crypto as legal tender. Since then, the IMF has consistently urged the country to reconsider its approach, highlighting the importance of strengthening regulation and supervision of the Bitcoin payment system.
In August, the IMF reiterated the need to mitigate risks from Bitcoin, acknowledging that while many risks have not yet materialized, there is a shared understanding that more transparency is necessary.
Despite the IMF’s concerns, El Salvador remains steadfast in its commitment to Bitcoin. President Nayib Bukele, a strong proponent of crypto, recognizes the challenges in achieving widespread adoption but believes the overall impact of Bitcoin has been positive.
Bukele has continued to invest in Bitcoin, even purchasing more during price drops, and has plans to use profits from Bitcoin Trusts to fund educational initiatives, such as building 20 schools, in an effort to promote crypto among its citizens.
