Fun

IMF Warns El Salvador Against Using Bitcoin as Legal Tender After ‘Bitcoin City’ Announcement

News Feed - 2021-11-24 01:11:39

IMF Warns El Salvador Against Using Bitcoin as Legal Tender After "Bitcoin City" Announcement


The International Monetary Fund (IMF) has warned El Salvador against using bitcoin as legal tender due to various risks associated with cryptocurrency. The warning came one day after Salvadoran President Nayib Bukele announced his plan to build a “bitcoin city” powered by a volcano and financed by bitcoin bonds. IMF Says El Salvador Shouldn’t Use Bitcoin as Legal Tender


The International Monetary Fund (IMF) warned El Salvador on Monday that the country should not use bitcoin as legal tender, citing various risks associated with the cryptocurrency.


El Salvador is the first country in the world to adopt bitcoin as legal tender alongside the U.S. dollar which it has used for two decades. The country’s bitcoin law went into effect in September. Furthermore, El Salvador has purchased 1,120 BTC, according to Salvadoran President Nayib Bukele.


The IMF regularly undertakes Article IV missions to member countries to consult with government officials before they request to use its resources. The IMF explained that for El Salvador, “The adoption of bitcoin as legal tender, the regulation and supervision of bitcoin services providers, and e-wallet Chivo were also discussed.”


In its “Staff Concluding Statement of the 2021 Article IV Mission” for El Salvador, the IMF detailed: Given bitcoin’s high price volatility, its use as a legal tender entails significant risks to consumer protection, financial integrity, and financial stability. Its use also gives rise to fiscal contingent liabilities. Because of those risks, bitcoin should not be used as a legal tender.


The IMF proceeded to recommend “narrowing the scope of the bitcoin law” and urged El Salvador to strengthen “the regulation and supervision of the new payment ecosystem.”


The recent statement from the IMF came one day after President Bukele announced a plan to build the world’s first bitcoin city powered by a volcano and financed by bitcoin bonds. He noted there would not be any taxes in the bitcoin city except for value-added tax (VAT).


“The plans to issue sovereign bonds and use the proceeds to buy bitcoin and fund infrastructure plans announced on November 20, occurred after the technical work of the mission concluded, and were not discussed with the authorities,” the IMF clarified.


Commenting on the IMF’s statement, Bukele said: Although we obviously do not agree on some things, such as the adoption of bitcoin, the analysis it makes of our country is interesting. Tags in this story bitcoin bonds, Bitcoin City, bitcoin legal, bitcoin legal tender, bitcoin usd, El Salvador, IMF, imf el salvador, imf warning


What do you think about the IMF advising El Salvador against using bitcoin as legal tender? Let us know in the comments section below. Eurosystem Approves New Oversight Framework Concerning Crypto Services REGULATION | 8 hours ago Nigerian Crypto and Blockchain Advocacy Group: Freezing or Closure of Bank Accounts Not Supported by Law REGULATION | 11 hours ago


Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleEurosystem Approves New Oversight Framework Concerning Crypto Services Next articleMonthly NFT Metrics Dive Bomb, NFT Sales Measured in USD Slip 16% Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItUS ‘Kidnapped’ Russian Crypto Businessman Denis Dubnikov, Lawyer Says


U.S. law enforcement agents have “kidnapped” crypto entrepreneur Denis Dubnikov in Mexico, before transferring him to the Netherlands where he was arrested, his lawyer told Russian media. Dubnikov is suspected of money laundering and faces up to 20 years in ... read more.Hong Kong Company Onedegree to Offer Insurance for Cryptocurrencies The Metaverse Is the Next Big Investment Theme, According to Morgan Stanley Moonshot to $90K — After Bitcoin Upgrade Taproot Activates, Crypto Advocates Expect the Price to Rally Ripple Launching Liquidity Hub Despite SEC Lawsuit Over XRP

News Feed

Member of St. Maarten’s Parliament Plans to Have His Entire Salary Paid in Bitcoin Cash
Member of St. Maarten’s Parliament Plans to Have His Entire Salary Paid in Bitcoin Cash On Saturday, the leader of the United People’s Party and member of St. Maarten
Stablecoins Ignite Record-Breaking May, Supply Jumps To $244B – Data
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Ethereum After 1559: Network Nears 2 Million ETH Burned Worth Over $6.9 Billion
Ethereum After 1559: Network Nears 2 Million ETH Burned Worth Over $6.9 Billion Approximately 205 days ago, the Ethereum network upgraded via the London hard fork which implemented
Polkadot active addresses hit record 600K
Zoltan Vardai11 hours agoPolkadot active addresses hit record 600KActive addresses on Polkadot have hit a new all-time high of 600,000 despite the community’s memecoin efforts failing to bring more attention to the pro
Bitcoin miner bankruptcies will be less common this cycle — Hut8 CEO
Brayden Lindrea3 hours agoBitcoin miner bankruptcies will be less common this cycle — Hut8 CEOA slew of Bitcoin miners filed for bankruptcy in the crypto winter of 2022 but Hut 8 CEO Asher Genoot is adamant that things
US Sentences Promoter of $3.4B Bitconnect Crypto Ponzi Scheme to 38 Months in Prison
US Sentences Promoter of $3.4B Bitconnect Crypto Ponzi Scheme to 38 Months in Prison The U.S. has sentenced a Los Angeles man to 38 months in federal prison for his role in the $3.
Gareth Jenkinson10 hours agoChainlink hits Ethereum layer-2 Arbitrum for cross-chain DApp developmentChainlink’s CCIP protocol has launched on Ethereum layer 2 Arbitrum One to help developers build cross-chain decentra
Makersplace Plans to Drop World’s First 2pac NFT Collection Authorized by the Shakur Estate
Makersplace Plans to Drop World’s First 2pac NFT Collection Authorized by the Shakur Estate On December 15, the non-fungible token (NFT) market platform Makersplace will drop an
Why is the BNB price up today?
Marcel Pechman54 minutes agoWhy is the BNB price up today?BNB price is up today, gaining 6% to reach $505, but is there further upside?436 Total views19 Total sharesListen to article 0:00Altcoin WatchOwn this piece of cr
Ethereum Active Addresses Surge By 36% In Support Of Bullish Price Action – Details
Este artículo también está disponible en español. Shortly aftersurging above $4,000 on December 6, Ethereum (ETH) has sunk into a state of consolidation showing no signif
Ethereum Struggles Below $3,659 Resistance: Is Momentum Fading?
Este artículo también está disponible en español. Ethereum is grappling with a critical resistance level at $3,659 as momentum appears to wane. After a period of steady g
China’s Government Fuels Stablecoin Economy: Hong Kong Protesters, Singapore and Mainland Residents Flee Capital Controls
China"s Government Fuels Stablecoin Economy: Hong Kong Protesters, Singapore and Mainland Residents Flee Capital ControlsA recent study published by Amun researcher, Eliézer