#IMF

El Salvador and the International Monetary Fund (IMF) have reached an agreement on a $1.4 billion loan package to support the country’s reform agenda.

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.

Today, the G20 countries unanimously approved a roadmap for regulating cryptocurrencies. This roadmap was proposed in a joint report by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) last month.

Contrary to forecasts, the value of Salvadoran bonds rose by 62% after Fitch downgraded the country's credit rating in September 2022. Perhaps the 79% surge in BTC during the same period played a role in this unexpected turn of events. In 2021, El Salvador declared Bitcoin as legal tender and currently holds 2546 BTC. Despite skepticism from the IMF, the country also allocated $1 billion for the construction of a mining farm with a capacity of 241 MW.

The IMF, in an article addressing CBDCs and cryptocurrencies in Latin America and the Caribbean, acknowledges, "While a few countries have completely banned crypto assets given their risks, this approach may not be effective in the long run." Interestingly, the article places more emphasis on the benefits of Central Bank Digital Currencies (CBDCs) rather than cryptocurrencies, while also highlighting potential problems linked with digital assets. Furthermore, the IMF recommends improving transparency by including cryptocurrency transactions in national data records.