The spokesperson for the International Monetary Fund reacted to the adoption by El Salvador of a law formalizing bitcoin in daily transactions. For the institution, the use of cryptocurrencies presents significant risks.
The spokesperson for the International Monetary Fund (IMF) warned Thursday of the risks of using bitcoin for daily transactions after the legalization of this cryptocurrency on June 9 in El Salvador, a Central American country currently in negotiations with the institution. for the granting of additional funds.
“The adoption of bitcoin as a legal currency raises a number of macroeconomic, financial and legal issues, which require very detailed analysis,” IMF spokesman Gerry Rice told reporters on June 10. He was reacting to the adoption, the day before, by the Parliament of El Salvador, of a law formalizing the use of bitcoin for daily transactions.
“What we’ve said in the past, in general, is that crypto assets can pose significant risks. Effective regulatory measures are crucial to address them, ”added Gerry Rice. IMF team due to meet Salvadoran President Nayib Bukele the same day, as international organization assesses approval of new billion dollar aid package to support economic recovery of the country after the crisis caused by the Covid-19 pandemic.
“The IMF teams will communicate at the end of this mission which takes place virtually,” said Gerry Rice. In April 2020, the IMF approved a package of emergency aid amounting to 389 million dollars for El Salvador, as the coronavirus was spreading all over the planet.
Currently, El Salvador’s main currency is the US dollar, and how the country plans to implement bitcoin as a functional currency is not yet clear. However, the President of El Salvador explained that one of the objectives of this new regulation was to escape the commissions of intermediaries to which the transfers of funds from the Salvadoran diaspora to their countries are subject. These exchanges amount to an amount equivalent to more than a fifth of the country’s economic activity.