El Salvador Rejects IMF Request to Abandon Bitcoin as Legal Tender – Regulation

El Salvador has rejected the International Monetary Fund (IMF) recommendation to abolish Bitcoin as legal tender. The country's finance minister is reported to have said "angrily": "No international organization will force us to do anything."

El Salvador says no to IMF on Bitcoin

The government of El Salvador has rejected a recommendation from the International Monetary Fund (IMF) to eliminate Bitcoin as legal tender in the country.

The IMF called on El Salvador to do so last week fall Using Bitcoin as Legal Tender and dissolve Fidebitcoin, the $150 million trust fund created for the Bitcoin Act.

El Salvador’s Finance Minister Alejandro Zelaya told a local television station that Bitcoin is a matter of “sovereignty.” According to media reports, he said “angrily”:

No international organization will force us to do anything.

“Countries are sovereign nations and they make sovereign decisions about public policy,” the finance minister added.

According to its analysis, “in the short term, the actual costs of implementing Chivo and operationalizing Bitcoin Law exceed the potential benefits,” the IMF said specified in its recent report on El Salvador.

The International Monetary Fund also recommended that the government of El Salvador charge fees for using its digital wallet, Chivo. Additionally, the IMF wants the Salvadoran government to stop giving away $30 in Bitcoin to anyone who signs up to use the Chivo wallet.

According to the IMF's latest report on El Salvador, the government saw no need to limit the scope of its Bitcoin law, but agreed that regulation could be strengthened.

El Salvador adopted Bitcoin as its national currency in September last year, with legal tender status alongside the US dollar. Since then, the country has bought 1,801 Bitcoin for his treasury.

In early January, El Salvador said 20 bills are in preparation for the legal structure of its Bitcoin bonds, which President Nayib Bukele expects to be oversubscribed. He also expects two other countries adopt Bitcoin as legal tender this year. Besides, he has predicted “a gigantic price increase” for Bitcoin.

What do you think about El Salvador rejecting the IMF's recommendation to eliminate Bitcoin as legal tender? Let us know in the comments section below.

Kevin Helms

As a student of Austrian economics, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the interface between economics and cryptography.

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