IMF Renews Call For El Salvador to Revamp Bitcoin Policies, Narrow Down the Scope of Its Legislation

The International Monetary Fund (IMF) is still not comfortable with El Salvador's Bitcoin gamble. At a press conference on Thursday, the IMF renewed its call for

The International Monetary Fund (IMF) has once again urged El Salvador to reconsider its Bitcoin law and regulatory framework.

During a press conference on Thursday, IMF spokesperson Julie Kozack highlighted the need for El Salvador to adjust the scope of its Bitcoin legislation. The IMF also recommended that the country limit public sector exposure to Bitcoin, Reuters reported.

“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 said on Oct. 3.

El Salvador’s Bitcoin Law came into effect in September 2021, making it the first country to adopt the flagship cryptocurrency as legal tender alongside the U.S. dollar. The IMF, which has been discussing a fund-supported program with El Salvador that would “assist with macroeconomic stabilization and adjustment and also growth-enhancing reforms,” has been a vocal critic of the Bitcoin experiment.

In 2021, the IMF warned that El Salvador’s decision to adopt Bitcoin posed “a number of macroeconomic, financial and legal issues.” However, the body acknowledged in August that many of the alleged risks of Bitcoin adoption “have not yet materialized.”

El Salvador’s President Nayib Bukele, who passed the bill to legalize BTC as legal tender, has consistently dismissed concerns from international organizations and U.S. politicians regarding his plan to transform the country into a Bitcoin hub.

Bitcoin Adoption Falls Short

El Salvador has been purchasing one full Bitcoin every day since March 16 this year, bringing its total stash of the primary cryptocurrency to 5,892, valued at approximately $346 million.

Earlier, the Central American nation also announced plans to issue groundbreaking bonds backed by Bitcoin mined locally using geothermal energy and introduced a citizenship-by-investment program for foreigners who pay $1 million in BTC or Tether’s USDT.

Bukele, however, admitted in August that the experiment had yielded mixed results thus far. He added that domestic Bitcoin adoption had fallen short of his expectations but remained a “net positive” for the country.

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