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El Salvador Rejected IMF Proposal To Drop Bitcoin Use

2 Mins read

Welcome to bulliscoming media, since the El Salvador president has governed the thrust to adopt Bitcoin as legal tender alongside the U.S. dollar in the country, he has been constantly facing criticism and hatred. El Salvador´s Legislative Assembly made the country the first to do so in June and the Bitcoin law went into effect in September.

El Salvador has rejected the IMF proposal or recommendation to eliminate the use of Bitcoin in the country. The IMF also added to their recommendation that El Salvador should crumble the $150 million trust fund that was created when the cryptocurrency was announced as legal tender while the country should return any unused funds to its treasury.

“We accept Bitcoin” that was announced at a barber shop in El Salvador aroused the interest of the IMF to send the recommendation to eliminate Bitcoin as legal tender.

The reason for the IMF recommendation was illustrated as a concern for the volatility of Bitcoin prices, as the cryptocurrency nearly double in value late last year, but has plunged in value recently.

They also stated that it can be used by criminals to conduct their unlawful activity.

The IMF also made a recommendation that El Salvador should eliminate the offer of $30 which was proposed as an incentive to encourage the people of the country to start using the digital wallet “Chivo” and increasing regulation of the digital wallet to protect consumers. They back it up by suggesting that there could rather be benefits to the use of Chivo, by only using dollars and not Bitcoin.

The IMF backed up their recommendation by saying thus,
“In the near-term, the actual costs of implementing Chivo and operationalizing the Bitcoin law exceed potential benefits,”

While El Salvador angrily rejected the IMF proposal as the El Salvador Treasury Minister whose name is Alejandro Zelaya angrily said that “no international organization is going to make us do anything, anything at all.”

Zelaya told a local television station that Bitcoin is an issue of “sovereignty.”

“Countries are sovereign nations and they take sovereign decisions about public policy,” he said.

Zelaya also added that El Salvador has complied with all financial transaction and money laundering rules.

The El Salvador government said that the trust fund was intended to allow the automatic conversion of Bitcoin to U.S. dollars – El Salvador´s other currency – to encourage people wary of adopting the highly volatile digital currency.

However, the El Salvador President whose name his “Nayib Bukele* had been dismissive of the IMF´s recommendations concerning Bitcoin.

The El Salvador government officials told the IMF that the launch of “Chivo” had significantly improved and boosted financial inclusion, which has attracted millions of people who previously lacked bank accounts into the financial system. They also spoke of the parallel tourism promotion targeting Bitcoin enthusiasts.

El Salvador said to the IMF that they will surely strengthen the regulation of cryptocurrency use in the country but they won’t eliminate the Bitcoin adoption

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About author
Samson Olatinwo is a creative content creator, a young fellow that derives passion from creating insightful content about cryptocurrency and blockchain technology. A cryptocurrency analyst, trader & investor. samsonolatinwo3@gmail.com
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