The International Monetary Fund is urging authorities in El Salvador to curb bitcoin usage by removing its legal tender status after the Central American nation became the first to adopt the digital currency in June last year.
«[IMF directors] urged the authorities to narrow the scope of the Bitcoin law by removing Bitcoin's legal tender status," according to a statement, stressing «larges risks» to financial stability, financial integrity, and consumer protection and from the issuance of bitcoin-backed bonds – a fresh financial instrument El Salvadoran president Nayib Bukele announced would debut this year.
Although the IMF supported Bukele’s goals of improving financial inclusion, it warned about the high levels of volatility – bitcoin has lost nearly half its value since peaking at more than $67,000 in November.
The IMF board of directors is made up of member governments including the U.S.
Nayib Bukele
Meanwhile, the Bukele administration continues to push for bitcoin adoption with plans to issue the bitcoin-backed bonds this year to fund a «Bitcoin City» powered by geothermal energy from a volcano.
Earlier this month, Bukele tweeted a forecast that bitcoin prices would reach $100,000 this year, adding that two more countries will adopt it as legal tender and that it will become a major issue during U.S. midterm elections in November.
