IMF urges El Salvador to ditch bitcoin as legal tender

IMF urges El Salvador to ditch bitcoin as legal tender

The IMF has urged El Salvador to remove bitcoin as a legal tender in the country and expressed concern over its plan to issue bonds linked to the cryptocurrency, as prices for major digital coins hit a rough patch.

In September El Salvador became the first nation in the world to make bitcoin legal tender in a plan spearheaded by Nayib Bukele, the country’s 40-year-old president and self-styled “CEO”. That meant the digital asset could be used to buy goods, send remittances and even pay taxes in the country.

But executive directors from the IMF — from which El Salvador is seeking more than $1bn in financing — raised concerns about that move in a statement on Tuesday.

“[The directors] stressed that there are large risks associated with the use of bitcoin on financial stability, financial integrity, and consumer protection, as well as the associated fiscal contingent liabilities,” the statement said.

Bukele, a Bitcoin evangelist, has since spent tens of millions of public dollars buying the cryptocurrency — so far losing money. He doubled down again last week as the price crashed in recent weeks to a six-month low.

The Central American nation’s talks with the IMF have shown little sign of progress, and worries