IMF calls for changes to El Salvador’s Bitcoin law
The International Monetary Fund (IMF) is pressuring El Salvador to make changes to its Bitcoin law to improve the prospect of a $1.4 billion loan. The Central American republic officially recognized Bitcoin as legal tender in 2021, a move strongly supported by President Nayib Bukele. The government has not only invested in the cryptocurrency, but also in mining it and creating reserves.
Risks according to the IMF
However, the IMF has raised concerns about the potential risks Bitcoin could pose to the country's financial stability and integrity. These concerns have led to delays in loan negotiations that have now lasted almost two years.
President Bukele’s loyalty to Bitcoin
President Bukele, on the other hand, remains undeterred by the IMF's critical stance and remains loyal to Bitcoin. He recently made a pledge to buy 1 Bitcoin a day, underlining his belief in the cryptocurrency. The ongoing conflict with the IMF poses a challenge to El Salvador's fiscal position and raises questions about the country's monetary sovereignty as well as the impact of Bitcoin on global finance.
Potential advantages and disadvantages for El Salvador
Although Bukele's stance may pose short-term risks for El Salvador, there is a possibility that it may also offer long-term benefits. The outcome of this dispute could have significant implications for the country's financial future.
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