IMF Urges El Salvador to Reduce Bitcoin Law in Negotiations

The IMF has encouraged El Salvador to evaluate and improve its Bitcoin and cryptocurrency laws. Julie Kozack, IMF communications director, emphasized IMF-Salvadoran collaboration at a news conference on October 3.

They want to finish an IMF-supported program to stabilize the economy, make adjustments, and encourage growth-focused reforms.

However, the IMF's advice addresses lingering worries about Bitcoin's legal tender dangers. Following this advise might improve the economy, attract foreign investment, and promote sustainable development.


Ignoring these guidelines may hinder economic recovery and increase bitcoin market uncertainty.

El Salvador's reaction to the IMF's guidelines will determine its financial stability and regional cryptocurrency rules.

Improve Bitcoin Risk Management, IMF Says
In its conversations with El Salvador, the IMF emphasizes Bitcoin risk management.


Julie Kozack listed IMF proposals to restrict El Salvador's Bitcoin statute, strengthen regulatory monitoring, and reduce government exposure to Bitcoin.


These precautions reduce the hazards of utilizing Bitcoin as legal money. These initiatives may help El Salvador build a more secure economy and responsibly handle cryptocurrencies.

Kozack also said El Salvador's 2025 budget blueprint improves governmental finances. If implemented well, these improvements might stabilize the financial market, boosting investment and economic development.

After this move in September 2021, the IMF cautioned that Bitcoin's volatility might cause financial instability and highlighted cryptocurrency transactions' lack of consumer safeguards. Such developments might affect future IMF funding, they said.

Although serious concerns had not yet emerged, the IMF continued to emphasize Bitcoin transparency and risk management in August 2024. The Bitcoin program may cause fiscal and financial stability difficulties, thus the agency has to do more.

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