Beautiful Virgin Islands

Tuesday, Jun 03, 2025

IMF urges El Salvador to remove bitcoin as legal tender

IMF urges El Salvador to remove bitcoin as legal tender

The IMF on Tuesday called on El Salvador to change course and stop using bitcoin as legal tender, citing "large risks" posed by the cryptocurrency.
The small Central American nation in September became the first country in the world to embrace the digital money, allowing consumers to use it in all transactions, alongside the US dollar.

The call by the Washington-based crisis lender came as the cryptocurrency dropped in value amid wider volatility on Wall Street in recent days, undoing much of the gains it had made during a record-setting climb in value last year.

The IMF staff had previously called on El Salvador's President Nayib Bukele to reconsider putting bitcoin at the center of his country's finances.

The latest pronouncement used much stronger language and came from the IMF's board, which is comprised of representatives of member governments including the United States.

The board's directors "urged the authorities to narrow the scope of the bitcoin law by removing bitcoin's legal tender status," according to a statement.

They "stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity and consumer protection" and with issuing bitcoin-backed bonds.

Bitcoin was trading at about $37,000 on Tuesday, having lost about half its value compared to the record of $67,734 hit in November.

Bitcoin shot up in value in 2021 as Wall Street showed a growing appetite for cryptocurrency, while Tesla boss Elon Musk's controversial tweets about the digital assets helped the market rise and fall alike.

The trend was not lost on Bukele, who was elected in 2019 with promises to fight organised crime and improve security in his violence-wracked country.

His move last September to legalize bitcoin in El Salvador drew worldwide attention and sparked protests on the streets of the capital San Salvador that were also over his administration's judicial reforms, which critics said threaten democracy.

Thousands took to the streets carrying signs reading "No to bitcoin" and at one point burning one of the bitcoin ATMS that had been installed nationwide.

They didn't appear to deter Bukele, who announced in November plans to build the world's first "Bitcoin City," powered by a volcano and financed by $1 billion cryptocurrency bonds.

His administration had also taken advantage of price drops to buy the digital asset for the country.

The IMF was wary of the cryptocurrency's adoption from the start, with spokesman Gerry Rice saying before Bukele made the move official, "Adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis."

In Tuesday's statement from the board, they noted the fund supports the aim of "boosting financial inclusion" which could be advanced using the country's "Chivo" e-wallet, but warned about the high levels of volatility in the cryptocurrency's exchange rate.

Bitcoin's value has shown some correlation with Wall Street equities, but pressure has also come from China's crackdown on the trading and mining of cryptocurrencies, and also the risk of wider regulatory action from the likes of Europe and the United States.

Analysts also say it faces increased competition in 2022 from rival digital assets like ethereum.
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
China Accuses US of Violating Trade Truce
Panama Port Owner Balances US-China Pressures
France Implements Nationwide Outdoor Smoking Ban to Protect Children
German Chancellor Merz Keeps Putin Guessing on Missile Strategy
Mandelson Criticizes UK's 'Fetish' for Abandoning EU Regulations
British Fishing Boat Owner Fined €30,000 by French Authorities
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
×