The International Monetary Fund (IMF) has once again expressed its concerns about El Salvador’s Bitcoin experiment, urging the country to limit its exposure to the cryptocurrency. The IMF’s spokesperson, Julie Kozack, made these remarks during a press conference on Thursday, highlighting the organization’s ongoing skepticism towards El Salvador’s decision to adopt Bitcoin as legal tender.
El Salvador made headlines in September 2021 when it became the first country in the world to accept Bitcoin as legal cash, a move championed by President Nayib Bukele. However, the IMF has been vocal in its criticism of this decision, citing potential macroeconomic, financial, and legal risks associated with Bitcoin’s volatility.
Despite the IMF’s warnings, President Bukele has remained steadfast in his support for the Bitcoin experiment, dismissing concerns raised by international institutions and politicians. He has even taken to social media to mock critics, sharing memes to downplay their grievances.
In an interview with TIME in August 2023, President Bukele admitted that the Bitcoin experiment had not fully met expectations. However, he remains committed to the project, with the government investing heavily in Bitcoin and implementing a law that requires businesses to accept the cryptocurrency as payment if they have the technology to do so.
Despite efforts to promote the use of Bitcoin, such as giving citizens $30 of free Bitcoin through the Chivo wallet in 2021, many Salvadorans are still hesitant to use the cryptocurrency for everyday transactions, as surveys have shown.
The IMF’s continued criticism and recommendations for El Salvador to limit its exposure to Bitcoin highlight the ongoing debate surrounding the country’s adoption of the cryptocurrency. As President Bukele and the government push forward with their Bitcoin experiment, it remains to be seen how the situation will evolve and whether El Salvador’s bold move will ultimately prove successful.