Well, we all knew this was coming. Ever since President Nayib Bukele of El Salvador made history through his decision to have the local government officially recognize Bitcoin (BTC) as legal tender, various other countries have since expressed interest in following in his footsteps. However, many had since anticipated that certain regulatory bodies and financial institutions would try and oppose this development, and this is precisely what may occur with the IMF (International Monetary Fund).
The IMF has thus made it known in the past that it is not supportive of any nation (particularly the smaller ones such as the Marshall Islands) to officially recognize any kind of digital currency to be used as legal tender. To this end, the IMF has now stated that President Bukele’s decision to have BTC be officially recognized as legal tender within El Salvador might cause financial as well as legal concerns.
IMF to consult with local lawmakers
It had been stated by IMF representative Gerry Rice during a recent press briefing that discussions are already underway with the lawmakers present in El Salvador regarding a possible loan that can be given to help boost the nation’s economy. The IMF had previously approved emergency funding for the country as a result of the pandemic which had broken out last year.
However, Gerry had also stated that a meeting with the current president of the small country will additionally take place later today, in which the subject of cryptocurrency is highly likely to be one of the main topics of discussion. Furthermore, the IMF believes that making BTC legal causes numerous financial, legal, and macroeconomic issues which need to be analyzed very thoroughly and carefully. Gerry added that the local authorities will continue to provide consultations as the IMF shall continue keeping its eye on any further developments.
Is El Salvador going too fast?
It must be said that El Salvador had managed to introduce the idea of legalizing Bitcoin and then actually make it legal tender in a relatively short amount of time. The announcement had initially come at the BTC 2021 Conference, and the bill itself had been passed by the local government shortly afterward.
Moreover, while it remains true that the nation still relies on the IMF’s support as far as dealing with the pandemic goes, the country had also started to think about the various needs of the BTC miners. To that end, President Bukele had stated that he shall be instructing LaGeo, an electrical company, to construct facilities to be made available to the miners in an effort to use the nation’s own volcanoes’ geothermal power. As of right now, El Salvador has 2 geothermal plants in operation in both Berlín and Ahuachapan.