(Asian News Hub) – Just as El Salvador increased its Bitcoin balance following the crypto crash, the International Monetary Fund has once again warned the country of risks linked to its pro-Bitcoin approach, India Today reported.
The international financial body “urged” El Salvador to drop the legal status it has granted to Bitcoin and highlighted the need for “strict regulation and oversight” of its new e-wallet Chivo and Bitcoin.
In its conclusion of 2021 Article IV consultation with El Salvador, the IMF noted that the adoption of a cryptocurrency as legal tender brings “large risks” to the country’s economy. These risks were found to be specific to “financial and market integrity, financial stability, and consumer protection.” The adoption of cryptocurrencies could also bring liabilities to the country in the future, the IMF warned.
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The assessment follows El Salvador’s move in September 2021 to adopt Bitcoin as legal tender. Since then, the country has amassed at least 1,801 bitcoins as per figures by Bloomberg. Just last week, El Salvador President Nayib Bukele announced on Twitter that the country had purchased 410 Bitcoin for a total of $15 million. “Some guys are selling really cheap,” Bukele wrote in his tweet mentioning the purchase.
