IMF Calls for El Salvador to Remove Bitcoin as Legal Tender

The International Monetary Fund (IMF) called for El Salvador to stop using bitcoin as legal tender, citing “large risks” from the cryptocurrency.

IMF directors “stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities,” according to a statement released on Tuesday.

The board directors urged officials of the small Central American country “to narrow the scope of the bitcoin law by removing bitcoin’s legal tender status.” Digital assets still require strict regulation, the report read.

The statement added that the IMF is concerned about risks associated with issuing bitcoin-backed bonds, referring to El Salvador’s President Nayib Bukele plan to raise $1 billion through a Bitcoin bond.

El Salvador became the first country in the world to use the digital money as an official currency, allowing consumers to use it in all transactions alongside the US dollar.

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