IMF: "El Salvador's Bitcoin Adoption Causes Economic and Legal Issues"

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[Asia Economy Reporter Yujin Cho] The International Monetary Fund (IMF) has warned that El Salvador's decision to adopt Bitcoin as legal tender will cause a series of risks and regulatory issues.

On the 10th (local time), Jerry Rice, IMF spokesperson, said, "Adopting Bitcoin as legal tender is a matter that requires very careful analysis," adding, "Many macroeconomic, fiscal, and legal issues may arise, so we are closely monitoring El Salvador's situation."

He continued, "Generally, cryptocurrencies can pose very significant risks, and effective regulatory measures are very important when dealing with them."

On the 8th, the El Salvadoran Congress passed the bill approving Bitcoin as legal tender, submitted by President Nayib Bukele, with a majority vote (62 out of 84 votes), making it the first country in the world to use Bitcoin as legal tender in everyday life.

President Bukele expressed hope that "the approval of Bitcoin as legal tender will help create jobs in the short term and provide financial access to those outside the formal economy."

However, experts pointed out that El Salvador's Bitcoin adoption could worsen corruption issues under the dictatorship and exacerbate economic difficulties.

Siobhan Modern, Head of Latin America Bond Investment Strategy at Amherst Pierpont Securities, analyzed, "Bitcoin adoption under a dictatorship will further worsen concerns about corruption, money laundering, and the independence of regulatory agencies."

Citibank also judged in a recent report that "the Bitcoin news coming out of El Salvador will create noise that complicates discussions with the IMF."

Previously, in April last year, the IMF approved emergency support of $389 million to El Salvador to overcome the COVID-19 crisis, and the El Salvadoran government has requested additional support.

The IMF plans to meet with Nayib Bukele and El Salvadoran government officials today to discuss financial support for El Salvador.

According to the Bloomberg Barclays index, El Salvador's bond investment performance this week recorded the worst loss among emerging countries.

This content was produced with the assistance of AI translation services.