The International Monetary Fund (IMF) is calling on El Salvador to stop accepting Bitcoin as a legal payment method due to its risks, FT reported.
- IMF directors flagged that Bitcoin is associated with large risks on financial stability, integrity, and consumer protection. They also cited the fiscal contingent liabilities associated with the digital token.
- The statement comes as El Salvador is looking to raise over $1 billion in financing from the multilateral lender. Talks between the two parties have shown little progress, with concerns over the discussions dragging the country’s bonds.
- The relationship between El Salvador and the United States — the biggest IMF backer — has also taken a hit under the leadership of President Nayib Bukele after a Washington official left the country saying the Salvador government was not interested in improving relations.
Under Bukele’s leadership, El Salvador was the first country to legalize Bitcoin as a tender in September. BTC is up 3.78%.