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 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 Information
24
℃
US war crimes unit investigates Russian actions in Ukraine
WASHINGTON D.C.: The U.S. State Department has announced the launch of a new program to capture and analyze evidence of ...
Popularity of Indonesian president sinks due to price rises
JAKARTA, Indonesia: A new poll released this week indicated that Indonesian President Joko Widodo's approval rating has hit a six-year ...
Tourist bus in Indonesia strikes billboard, 14 dead
EAST JAVA, Indonesia: A tourist bus crashed into a billboard on a highway on Indonesia's main island of Java this ...
Schools, restaurants in Belgrade evacuated following bomb threats
BELGRADE, Serbia: Belgrade was paralyzed this week by a series of bomb threats, including against schools, bridges, restaurants and a ...
Jeff Bezos tells Biden that inflation most hurts poor
WASHINGTON D.C.: In a tweet this week, Amazon founder Jeff Bezos criticized President Joe Biden for the second time in ...
As food prices rise, Iranians take to the streets to protest
TEHRAN, Iran: According to social media posts, protests that began last week across Iran over a reduction in state subsidies ...
Face masks return for workers at some Michigan auto factories
Detroit, Michigan: General Motors, Ford and Chrysler parent Stellantis NV said they are reinstating the face mask mandate for employees ...
South Korea president pledges aid to North in treating Covid outbreak
SEOUL, South Korea: As North Korea grapples with a severe COVID-19 outbreak, South Korean President Yoon Suk-yeol has said that ...
Asian stocks mostly plummet, as sellers take charge
SYDNEY, NSW, Australia - Stocks in Asia mostly sank on Thursday, following on from a rout on Wall Street overnight."There ...
REE Automotive to build commercial EV chassis plant in UK
LONDON, England: Israeli startup REE Automotive has announced that it will build an assembly plant for electric vehicles (EVs) in ...
China prepares to deliver its version or Boeing, Airbus aircraft
BEIJING, China: The Commercial Aircraft Corp of China (Comac) completed a three-hour pre-delivery test flight of China's C919 aircraft at ...
U.S. stocks shatter, Dow Jones industrials drop more than 1,000 points
NEW YORK, New York - Soaring prices have taken their toll on U.S. retailer Target which reported first-quarter profit had ...
