IMF Urges El Salvador Again to Strengthen Regulatory Framework and Oversight of Bitcoin

Election 2024 coverage presented by
The International Monetary Fund (IMF) recommended on Thursday that El Salvador narrow the scope of the bitcoin law and strengthen the regulatory framework and oversight of the bitcoin ecosystem.
During a press conference, IMF spokesperson Julie Kozack also said that the IMF recommended El Salvador limiting public sector exposure to bitcoin, Reuters reported.
This isn’t the first time IMF has warned El Salvador. Most recently, in August, the IMF said something similar when it declared in a statement 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.” At that time, the IMF also said that “additional discussions in this and other key areas remain necessary.”
In fact, the back-and-forth history between El Salvador and the IMF over bitcoin goes back years. In November 2021, the IMF said that bitcoin should not be used as legal tender in El Salvador and urged the Central American country to strengthen the regulation and supervision of that ecosystem, something it called for again in January 2022.
El Salvador established bitcoin as legal tender in September 2021, being the first country to do so globally. Currently, it holds 5892 BTC, equivalent to about $345 million at today’s price.
Nayib Bukele, El Salvador’s president, recently said his plan to make the country a hotbed for the largest and oldest cryptocurrency has been “net positive” but adoption has fallen short of his expectations.
In Thursday’s presentation, the IMF positively highlighted Bukele’s budget for 2025, which expects the country to be debt-free.
Read more: El Salvador President Nayib Bukele to Present Debt-Free Budget for 2025
CORRECTION (Oct. 3, 2024, 23:50 UTC): Fixes day of week in first paragraph.
Edited by Aoyon Ashraf.
Disclosure
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.
Andrés Engler is a CoinDesk editor based in Argentina, where he covers the Latin American crypto ecosystem. He holds BTC.