The International Monetary Fund, the International Monetary Fund (IMF), once again criticized El Salvador’s adoption of Bitcoin’s fiat currency.
In a report based on a visit to El Salvador, the IMF noted that “considering Bitcoin’s high price volatility, the use of Bitcoin as a fiat currency carries significant risks to consumer protection, financial health and financial stability.”
The International Monetary Fund (IMF) also warned that “Bitcoin should not be used as a fiat currency because of these risks.”
The IMF also recommended narrowing the scope of Bitcoin laws towards El Salvador and urged stricter regulation and oversight of the new payment ecosystem.
El Salvador, Central America, adopted Bitcoin as a fiat currency for the first time in the world in September.
Even at the time, the IMF expressed a negative opinion, saying it “raises many macroeconomic, financial and legal issues.”
El Salvador’s President Nayb Bukele, who insisted on adopting Bitcoin as a legal currency despite internal and external concerns, announced on the 20th that he would mine Bitcoin with volcanic geothermal heat and build a ‘Bitcoin City’ where various taxes are not levied.
After the IMF’s report was released, President Bukele tweeted, “Although opinions differ on some issues, such as Bitcoin adoption, the analysis of our country is interesting.”