The International Monetary Fund (IMF) has repeated its warning about El Salvador’s embrace of Bitcoin as an optional legal tender. “Privately issued crypto-assets like Bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut,” the IMF tweeted yesterday while sharing a link to its original warning of July 26, 2021. Earlier, the IMF slammed El Salvador for its decision to adopt Bitcoin, suggesting the move “raises a number of macroeconomic, financial, and legal issues.”
Privately issued cryptoassets like Bitcoin come with substantial risks. Making them equivalent to a national currency is an inadvisable shortcut. Read more in our #IMFBlog by the IMF’s Tobias Adrian and @RhodaWeeksBrown: https://t.co/r1NwBuyAq8 pic.twitter.com/Sk9tOjvhD6
— IMF (@IMFNews) August 29, 2021
Global regulators continue to criticize El Salvador’s bitcoin law.
Global financial regulators have maintained that “crypto-assets can pose significant risks and effective regulatory measures are very important when dealing with them.” The IMF is not alone in its concerns. The World Bank has also been sharply critical of President Bukele’s decision earlier this summer, refusing to help the country implement its policy, citing environmental and transparency concerns. El Salvador is all set to adopt Bitcoin as legal tender on September 7, and the country’s Congress has prepared a $150 million fund to help the Bitcoin project get off the ground next week.
El Salvador’s Congress approved a $150 million fund.
Yesterday, El Salvador’s Congress approved a $150 million fund that will help facilitate transactions between U.S. dollars and the flagship cryptocurrency. “The purpose of this law is to financially support the alternatives that the state provides, without prejudice to private initiatives, that allow the user to carry out the automatic and instantaneous convertibility of Bitcoin to the United States dollar,” a congressional document reportedly said. The fund will be reportedly redirected from the current budget for the finance ministry and administered by BANDESAL, the country’s state development bank.