The International Monetary Fund on Monday warned El Salvador towards utilizing bitcoin as official tender given the dangers related to the cryptocurrency, a day after the nation introduced plans for the world’s first “Bitcoin City”.
El Salvador, which has used the US greenback for twenty years, grew to become the primary nation on this planet in September to legalize bitcoin as authorized tender.
“Given Bitcoin’s excessive value volatility, its use as a authorized tender entails vital dangers to consumer protection, monetary integrity, and monetary stability,” the IMF mentioned in an announcement after concluding a monitoring mission to the small Central American nation.
“Its use also gives rise to fiscal contingent liabilities. Because of those risks, Bitcoin should not be used as a legal tender.”
The Washington-based lender thus beneficial “narrowing the scope of the Bitcoin law” that made it official forex and urged “strengthening the regulation and supervision of the new payment ecosystem.”
The IMF assertion got here a day after President Nayib Bukele mentioned El Salvador plans to construct a “Bitcoin City” powered by a volcano and financed by cryptocurrency bonds.
© 2021 AFP
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IMF urges El Salvador towards utilizing bitcoin as official forex (2021, November 23)
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