IMF Urges El Salvador to Remove Bitcoin's Legal Tender Status
Voice of America
26 Jan 2022, 11:37 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.'
Share
Tweet
Share
Flip
Email
Subscribe and Follow
Get a daily dose of Haiti Sun 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 Haiti Sun.
More InformationSources: Meta won’t alter data model, faces fresh EU charges
BRUSSELS, Belgium: Meta is holding firm on its controversial pay-or-consent model, a move that could lead to fresh antitrust charges...
Trump’s tariff push could push US rates above 20%, ICC says
LONDON, U.K.: American consumers and businesses could soon face the highest overall tariff burden in more than a century, according...
U.S. Urged to Investigate After Israeli Settlers Beat Palestinian-American to Death
The family of Sayfollah Saif Musallet, a 20-year-old American citizen who was beaten to death by Israeli settlers in the occupied West...
New Hampshire federal court ruling defies Trump’s citizenship move
CONCORD, New Hampshire: A federal judge in New Hampshire issued a crucial ruling on July 10 against President Donald Trump's executive...
Houthis attack cargo ship in Red Sea, raising maritime safety fears
DUBAI, U.A.E.: A cargo ship flagged under Liberia, known as the Eternity C, sank in the Red Sea following an attack executed by Yemen's...
Trump administration restarts Ukraine arms deliveries
WASHINGTON, D.C.: The Trump administration has started sending some weapons to Ukraine again, just a week after the Pentagon told officials...
Bitcoin soars to a record on Trump policies, institutional demand
NEW YORK CITY, New York: Bitcoin surged to a new all-time high this week, buoyed by growing institutional interest and a wave of pro-crypto...
Huawei eyes new buyers for AI chips amid U.S. export curbs
SHENZHEN, China: As global chip competition intensifies, Huawei Technologies is exploring new markets in the Middle East and Southeast...
U.S. food prices at risk as Brazil tariff hits key imports
LONDON/NEW YORK CITY: American grocery bills may be headed higher as coffee and orange juice prices face upward pressure from new tariffs...
WK Kellogg sold to Ferrero as food giants chase shelf power
BATTLE CREEK, Michigan: In a major consolidation of iconic food brands, WK Kellogg has agreed to be acquired by the owner of Ferrero...
Filmmaker joins biotech effort to bring back extinct giant bird
WASHINGTON, D.C.: Filmmaker Peter Jackson's lifelong fascination with the extinct giant New Zealand flightless bird called the moa...
India seeks WTO nod for retaliatory tariffs on US
NEW DELHI, India: India has submitted a revised proposal to the World Trade Organization (WTO) in Geneva to implement retaliatory tariffs...
