El Salvador Should Restrict Bitcoin Law, IMF Says
The International Monetary Fund has advised El Salvador to restrict the use and scope of its bitcoin laws once more. The IMF continues to work with the Salvadoran government, according to Julie Kozack, director of communications at the organization, during a news briefing on Thursday.
Addressing risks arising from Bitcoin is a key element of these discussions. What we have recommended is a narrowing of the scope of the bitcoin law, strengthening the regulatory framework and oversight of the bitcoin ecosystem, and limiting public sector exposure to bitcoin,
Kozack
Kozack stated that the IMF hopes to come to an agreement with El Salvador over a new program that will assist with growth-promoting measures as well as macroeconomic stabilization and adjustment.
IMF Pushes for El Salvador to Address Bitcoin-Related Financial Risks
The proposal from the IMF comes after a statement made in August that particularly addressed El Salvador’s financial problems and included Bitcoin as a key topic of discussion.
Progress has been made in the negotiations toward a Fund-supported program, focused on policies to strengthen public finances, boost bank reserve buffers, improve governance and transparency, and mitigate the risks from bitcoin,
the IMF
The first nation to accept Bitcoin as an alternative form of legal money is El Salvador, where the so-called Bitcoin law went into force in September 2021. The IMF wants to discuss measures with the Salvadoran government to stabilize the country’s economy, including suggestions for controlling Bitcoin-related risks.
On bitcoin, 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. Additional discussions in this and other key areas remain necessary,
the IMF
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