IMF Warns President Nayib Bukele About Bitcoin Adoption In El Salvador

IMF warns El Salvador after making Bitcoin legal currency (MarketWatch)

JAKARTA – The international financial institution (IMF) warned the President of El Salvador, Nayib Bukele regarding his decision to adopt Bitcoin as a legal tender in his country. Given the financial risks that cryptocurrencies can pose.

According to Bitcoin News, the IMF warned that the move could cause problems for "macroeconomics, finance and law" in El Salvador.

“Crypto assets can pose significant risks and effective regulatory measures are essential when dealing with them,” an IMF spokesperson said.

El Salvador has been in the world spotlight due to its policy of passing a bill related to the legalization of Bitcoin. Therefore, El Salvador has become the first country in the world to adopt Bitcoin as a legal tender other than the US dollar.

"The adoption of Bitcoin as a legal tender raises a number of macroeconomic, financial and legal issues that require careful analysis so we are following developments closely and will continue our consultations with the authorities," said IMF chief Gerry Rice.

“Crypto assets can pose significant risks and effective regulatory measures are essential when dealing with them,” Rice added at a press conference held in Washington.

He also said that the IMF would meet El Salvador's President, Nayib Bukele on Thursday to discuss the recently passed Bitcoin bill. Meanwhile El Salvador has discussed with the IMF to seek a loan of 1 billion US dollars.

In addition, El Salvador also announced that they would use energy from the volcano for Bitcoin mining activities.

“I just instructed the president of La Geo (a geothermal power company in El Salvador) to plan to offer Bitcoin mining facilities at a very low cost, 100 percent clean, 100 percent emitted, 0 percent energy emissions from our volcano. It will develop rapidly," El Salvador President Nayib Bukele said in a statement.