IMF Urges El Salvador to Remove Bitcoin's Legal Tender Status
Voice of America
26 Jan 2022, 16:07 GMT+10
The International Monetary Fund's board 'urged' El Salvador to do away with its move to make bitcoin a legal tender, while calling for strict regulation of the country's e-wallet.
IMF board members 'urged the authorities to narrow the scope of the Bitcoin law by removing bitcoin's legal tender status,' the IMF said in a Tuesday statement following a yearly consultation.
Salvadoran Finance Minister Alejandro Zelaya had no comment.
In September, El Salvador became the first country to make bitcoin a legal tender, alongside the U.S. dollar. Its economy has been dollarized for two decades.
The IMF has since repeatedly called for the move to be reversed, citing financial, economic and legal concerns.
The IMF board said it was important to boost financial inclusion and that the Chivo e-wallet, the government's bitcoin exchange, could play this role.
However, they see 'the need for strict regulation and oversight of the new ecosystem.'
Some board members were also concerned about the risks associated with El Salvador's expected issuance of bitcoin-linked bonds, the IMF said.
The country is preparing the issuance of $1 billion in bonds, half of which would be used to purchase bitcoin. The government bets that the exposure to bitcoin gains will entice investors who would receive a dollar yield of 6.5%, much lower that what the market currently prices for similar Salvadoran government debt, closer to 17%.
In its statement, the IMF also warned that at current debt spending levels El Salvador's public debt could rise to about 96% of GDP in 2026, calling it an 'unsustainable path.'
Subscribe and Follow
Get a daily dose of Herald Globe news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
News RELEASES
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Herald Globe.
More Information
85
℉
Arab states reaching energy targets with alternative solar, wind power
DUBAI, UAE: The Arab states have built significant amounts of solar and wind power installations, and are in line to ...
Brexit seen as driving force behind Scotland independence vote
LONDON, England: A second referendum on Scottish independence is set to be held in October 2023. The Scottish government, led ...
Tuvalu pulls out of UN ocean conference after China blocks Taiwan
LISBON, Portugal: Tuvalu Foreign Minister Simon Kofe walked out of the opening cermonies of this week's United Nations Ocean Conference ...
14 ft. crocodile captured by man in Indonesia, returned to nature
SULAWESI, Indonesia: Using just a rope, an Indonesian man, supported by fellow villagers on the island of Sulawesi, captured a ...
Watford FC bans Qatar friendly due to fans' human rights concerns
WATFORD, UK: Watford F.C. has cancelled a friendly match against the Qatar national team due to the Gulf country's human ...
Istanbul Pride parades blocked by Turkey police
ISTANBUL, Turkey: Turkish police detained dozens of people after local authorities banned Istanbul's annual Pride parade from going ahead this ...
BLAST Premier World Final 2022 to take place in Abu Dhabi
BLAST announced that this year's Premier World Final will be staged in Abu Dhabi, UAE. The world championship will be ...
Cubs stay hot, knock off Red Sox
Rookie Christopher Morel homered for a third straight game, during a go-ahead, three-run sixth inning, and four Chicago relievers held ...
Canucks add Mike Yeo, Jeremy Colliton to coaching staff
A pair of recent NHL head coaches joined the Vancouver Canucks' staff on Friday. The team announced Mike Yeo, most ...
Brewers' Adrian Houser (elbow) heads to 15-day IL
The Milwaukee Brewers placed right-handed pitcher Adrian Houser on the 15-day injured list with a right flexor strain, the team ...
Astros place C Jason Castro (knee) on 10-day IL
The Houston Astros placed catcher Jason Castro on the 10-day injured list Friday due to left knee discomfort. Castro, 35, ...
Report: Mavericks interested in Cavs RFA Collin Sexton
Cleveland could soon have a decision to make on restricted free agent Collin Sexton, Hoops Wire reported. According to the ...
