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The International Monetary Fund has already spoken out against tiny countries such as the Marshall Islands accepting digital currencies as legal cash.
The International Monetary Fund has expressed alarm over El Salvador’s recent move to declare Bitcoin legal money in the country.
In a Thursday press briefing from the International Monetary Fund, or IMF, spokesperson Gerry Rice said the group was already in discussions with lawmakers in El Salvador over a loan to support the country’s economy, having approved emergency funds related to the pandemic last year. However, Rice said an IMF team would be meeting with President Nayib Bukele today and implied crypto would be a likely topic for discussion.
“Adoption of Bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis,” said Rice. “We are following developments closely, and we’ll continue our consultations with the authorities.”
The IMF’s spokespeople have frequently expressed worries about countries adopting digital money. In March, the organisation issued a similar warning against the Marshall Islands adopting their digital sovereign currency, known as SOV, as legal tender, citing legal and financial hazards. In that situation, a spokeswoman stated that the local economy of the islands had been stretched by the economic consequences of the epidemic and would most likely not be addressed with the SOV.
In the instance of El Salvador, the interval between the presentation of ideas and their implementation appears to be short. President Bukele declared in a pre-recorded video statement at the Bitcoin 2021 conference this weekend that he will submit legislation to make Bitcoin (BTC) legal cash in El Salvador. Yesterday, the measure was enacted with a supermajority in the nation’s Legislative Assembly.
The interval between the presentation of ideas and action in El Salvador appears to be short. President Bukele declared in a pre-recorded video statement at the Bitcoin 2021 conference this weekend that he will propose legislation making Bitcoin (BTC) legal cash in El Salvador. Yesterday, the nation’s Legislative Assembly enacted the measure with a supermajority.
“Crypto assets can pose significant risks,” said Rice. “Effective regulatory measures are very important when dealing with them.”