The International Monetary Fund (IMF) has once again urged El Salvador to bolster its regulatory framework and oversight of its bitcoin ecosystem, recommending that the country narrow the scope of its bitcoin law. During a press conference on Thursday,
IMF spokesperson Julie Kozack emphasized the need for El Salvador to limit public sector exposure to bitcoin, according to Reuters.
This is not the first time the IMF has raised concerns about El Salvador’s bitcoin policy. In August, the IMF issued a similar warning, stating that while many of the risks associated with the country’s adoption of bitcoin as legal tender had not yet materialized, further efforts were needed to enhance transparency and address potential fiscal and financial stability risks. The IMF also called for additional discussions on key areas related to bitcoin oversight.
The IMF’s concerns date back to November 2021, just two months after El Salvador became the first country in the world to establish bitcoin as legal tender.
At that time, the IMF advised against using bitcoin as legal currency and called for stronger regulation and supervision of the cryptocurrency ecosystem—a recommendation it reiterated in January 2022.
Since adopting bitcoin in September 2021, El Salvador has accumulated approximately 5,892 BTC, valued at around $345 million at current prices. Despite this, the country’s bitcoin project has faced challenges.
President Nayib Bukele, who spearheaded the initiative, recently acknowledged that while the overall impact of the policy has been “net positive,” the level of bitcoin adoption has not met his expectations.
However, in Thursday’s statement, the IMF did offer some praise for Bukele’s budget plans for 2025, which aim to make El Salvador debt-free a positive note amid ongoing debates about the country’s pioneering but controversial embrace of cryptocurrency.
