El Salvador should reconsider its plans to expand its exposure to Bitcoin

SAN SALVADOR – After completing a mission in El Salvador, the International Monetary Fund (IMF) He suggested the Central American country this Friday to “reconsider” its plans around Bitcoin after almost a year and a half since the cryptocurrency was approved as the second legal currency.

“Given legal risks, fiscal fragility, and the largely speculative nature of crypto markets, the (Salvadoran) authorities should reconsider their plans to expand government exposure to Bitcoin, including issuing tokenized bonds,” the statement warns. multilateral organization.

The conclusion comes days after the El Salvador Congress approved the Digital Assets Law which establishes regulations for the creation of Salvadoran Bitcoin bonds.

According to the government of that country, the law seeks to attract national and foreign investment, as well as create new financing opportunities for citizens, companies and the public sector. But the IMF remains skeptical of it.

“In this context, underlying risks to financial integrity and stability, fiscal sustainability and consumer protection persist,” it warns.

According to data from the Central Reserve Bank of El Salvador (BCR), in 2022 the Central American country received 7,742 million dollars in remittances. Of these, 1.6% was through electronic wallets. Likewise, the University Institute of Public Opinion of the UCA adds that 74 out of 100 Salvadorans do not use Bitcoin.

A scenario that could change —warns the IMF— given the legal currency status of Bitcoin and the new reforms approved by the Congress of that country.

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