IMF Executive Board Recommends El Salvador To Cancel Bitcoin Legal Tender

The International Monetary Fund (IMF) has issued a recommendation to El Salvador on using Bitcoin as a legal tender. According to the global financial institution, the continued use of Bitcoin as legal tender poses serious threats to El Salvador’s financial stability as well as consumer protection.

IMF Raises Concerns Over Consumer Protection

On Tuesday, the executive board of the IMF recommended that El Salvador should halt the use of bitcoin as legal tender in the country for reasons bordering around the financial risks attached to it.

The report stressed even further the risks linked to the use of Bitcoin especially regarding consumer protection and financial stability and integrity. The report then urged Salvadoran authorities to regulate the Bitcoin law simply by discontinuing the legal tender status of Bitcoin.

Additionally, some of the IMF Directors also expressed concern over the risks that might come with issuing Bitcoin-backed bonds.

Meanwhile, back in November 2021, an IMF staff had already shared opinions against the use of Bitcoin as legal tender in El Salvador.  In fact, the staff suggested that the Central American country should rather focus on strengthening its regulatory framework and also, the supervision of its newly established crypto payment ecosystem.

El Salvador has been widely publicized, especially since September 2021 when it adopted Bitcoin as legal tender.

Meanwhile, the President of El Salvador, Nayib Bukele has also become a crypto advocate and one of the most prominent and easily recognizable crypto advocacy voices.