Although the risks “have not materialized so far due to the limited use of bitcoin” it could be used more in the future as it is legal tender and due to new legislative reforms to encourage the use of crypto assets, including tokenized bonds, experts warn.
In this context, they say, “underlying risks to financial integrity and stability, fiscal sustainability, and consumer protection persist.”
For the IMF, greater transparency about government transactions in bitcoin and the financial situation of the “state wallet” known as chivo “remains essential.”
“Given legal risks, fiscal fragility, and the largely speculative nature of crypto markets,” the Fund recommends that authorities “reconsider their plans to expand government exposure to bitcoin, including issuing tokenized bonds.”
In 2022, the Salvadoran economy grew 2.8% and since March of that year “the unprecedented reduction in crime and strong income from remittances and tourism have contributed to the robust dynamics of activity and investment,” says the IMF. Last year the average annual inflation was 7.2%.
