Bitcoin and El Salvador: the IMF sends a nice warning ..

The International Monetary Fund is contesting , or at least considering with skepticism, El Salvador's recent move to make Bitcoin its second official currency, after the US dollar.

El Salvador President Nayib Bukele announced his plans to regularize Bitcoin as legal tender at the annual Bitcoin Conference in Miami; its bill was officially adopted a few days ago, making El Salvador the only country in the world to require local merchants to accept cryptocurrency.
"The adoption of Bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis, so we are closely following developments and will continue our consultation with the authorities," said the spokesperson. IMF Gerry Rice at a press conference Thursday morning. . "Cryptocurrencies can carry significant risks and effective regulatory measures are very important when it comes to them."

Bukele is widely regarded as an autocrat: ever since he took power in 2019, he has emptied the country's constitutional court and used the threat of violence to effectively coerce the legislature into adopting his policies. However, the move to use Bitcoin could really lead to a profound change in the country, where 70% of citizens do not have access to the banking system which remains a privilege for the few. Paradoxically, a country that is outside the ordinary payment circuits could, in a lateral way, bring its citizens into the credit circuit, but the IMF does not like this very much. “Every restaurant, every barber, every bank – everything can be paid for in US dollars or Bitcoin and no one can refuse payment,” Bukele said on Twitter Space earlier this week. El Salvador adopted the US dollar as its main currency in 2001, therefore, however, it does not have a national currency that risks being replaced by BTC. For citizens, US dollars or BTC are in any case "foreign" currencies. However, the IMF will discuss the matter with Bukele directly, hopefully without excessive threats.

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The article Bitcoin and El Salvador: the IMF sends a nice warning .. comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Wed, 16 Jun 2021 12:33:25 +0000.