🌋 IMF Backs Down: Bitcoin Adoption in El Salvador Surges Ahead!
posted 7 Oct 2024
The International Monetary Fund (IMF) has revised its stance on El Salvador’s Bitcoin adoption. Initially, the IMF had been pressing for a complete ban on BTC’s use as official legal tender since 2021.
At a recent press conference, IMF officials revealed a more reconciliatory approach regarding Bitcoin in El Salvador..
Bukele made Bitcoin legal tender in 2021 to reduce the country’s dependency on the Federal Reserve’s control over the U.S. dollar. His decision was positioned as a step toward achieving national sovereignty and enhancing economic freedom.
The International Monetary Fund (IMF) had long opposed El Salvador’s Bitcoin policy, even employing tactics like destabilizing the country’s bonds. Yet, recent remarks may indicate the IMF has recognized that openly opposing Bitcoin adoption is no longer viable.
Analysts have pointed out that the IMF’s shift in tone coincides with Bukele’s growing confidence and the apparent success of his Bitcoin-based initiatives. A Forbes analysis of El Salvador’s 2025 budget suggests that the country could eventually forgo IMF loans altogether.
This prospect may lead the IMF to reconsider its stance, as a cooperative approach could become the Fund’s best option to maintain ties with El Salvador’s leadership.
However, the IMF has now scaled back its demands, reducing them to a recommendation to minimize state support for the world’s first cryptocurrency.
At a recent press conference, IMF officials revealed a more reconciliatory approach regarding Bitcoin in El Salvador..
What we have recommended is a narrowing of the scope of the Bitcoin law, strengthening the regulatory framework and oversight of the Bitcoin ecosystem, and limiting public sector exposure to Bitcoin,explained Julie Kozack, IMF spokesperson.
This change suggests that the IMF now recognizes Bitcoin’s increasing importance in El Salvador’s economy under President Nayib Bukele.
Bukele made Bitcoin legal tender in 2021 to reduce the country’s dependency on the Federal Reserve’s control over the U.S. dollar. His decision was positioned as a step toward achieving national sovereignty and enhancing economic freedom.
The International Monetary Fund (IMF) had long opposed El Salvador’s Bitcoin policy, even employing tactics like destabilizing the country’s bonds. Yet, recent remarks may indicate the IMF has recognized that openly opposing Bitcoin adoption is no longer viable.
President Nayib Bukele of El Salvador Source: economist.com
Bukele’s June re-election gave him the green light to continue pushing his Bitcoin-driven economic policies. The president has remained focused on further integrating cryptocurrency into El Salvador’s economy.
Analysts have pointed out that the IMF’s shift in tone coincides with Bukele’s growing confidence and the apparent success of his Bitcoin-based initiatives. A Forbes analysis of El Salvador’s 2025 budget suggests that the country could eventually forgo IMF loans altogether.
This prospect may lead the IMF to reconsider its stance, as a cooperative approach could become the Fund’s best option to maintain ties with El Salvador’s leadership.
The IMF’s incentives are not aligned with El Salvador’s, and El Salvador should forge its own path, independent of IMF interests,сoncludes John Dennehy, founder of Salvadoran NGO Mi Primer Bitcoin.
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