The International Monetary Fund (IMF) issued a recommendation on Thursday suggesting that El Salvador should refine the bitcoin law and improve the regulatory framework and oversight within the bitcoin domain.
During a press briefing, IMF representative Julie Kozack mentioned that the organization advised El Salvador to limit the public sector’s exposure to bitcoin, as detailed in a report by Reuters here.
This isn’t the first warning from the IMF to El Salvador. In August, the IMF issued a similar statement, stating that “while many of the risks have not yet materialized, there is joint recognition that further efforts are needed to enhance transparency and mitigate potential fiscal and financial stability risks from the Bitcoin project.” During that statement, the IMF also emphasized that “additional discussions in this and other key areas remain necessary.”
The ongoing interaction between El Salvador and the IMF regarding bitcoin spans several years. In November 2021, the IMF asserted that bitcoin should not serve as legal tender in El Salvador and encouraged the Central American nation to enhance regulation and oversight of the cryptocurrency ecosystem, a recommendation it reiterated in January 2022.
El Salvador made bitcoin legal tender in September 2021, marking it as the first nation to do so worldwide. The country currently possesses 5,892 BTC, valued at around $345 million at today’s market rate.
Nayib Bukele, the president of El Salvador, recently indicated that his ambition to transform the country into a hub for the largest and most established cryptocurrency has yielded a “net positive” outcome, although the adoption has not met his expectations.
During a presentation on Thursday, the IMF positively acknowledged Bukele’s 2025 budget proposal, which anticipates the country achieving a debt-free status.
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