El Salvador passed a bill that makes Bitcoin legal tender this week, putting it on an equal footing with the country’s official national currency, the US dollar.
While this was celebrated as a victory for Bitcoin, the International Monetary Fund The IMF has since raised concerns about the move. During a press conference on the matter, IMF spokesman Gerry Rice said:
“The adoption of bitcoin as legal tender raises a number of macroeconomic, financial and legal issues that require very careful analysis.
We are closely monitoring developments and will continue our consultations with the authorities. “
The IMF does not approve the sovereign adoption of Bitcoin in El Salvador
El Salvador quickly went from announcing its intention to adopt Bitcoin to discussions in Congress and then passed the proposal into law.
President Nayib Bukele spoke about the economic benefits of Bitcoin, particularly in helping Salvadorans living abroad send remittances home.
However, the IMF and foreign investors don’t look favorably in this movement.
El Salvador is currently negotiating with the IMF for a $ 1 billion financing program to fill budget gaps through 2023. This is in addition to a $ 389 million loan received last month as a COVID relief payment.
The billion-dollar program was already in jeopardy following the removal of the nation’s attorney general and several senior judges. But the legalization of Bitcoin casts more doubt on the deal.
Last month, the Congress of El Salvador voted in favor of remove its main prosecutor, Attorney General Raúl Melara, and five Supreme Court justices.
The US authorities expressed concern, as they consider Melara among the few that keep President Bukele and his party under control of corruption. A tweet from President Bukele addressing the international community, read:
“We want to work with you, trade, travel, get to know each other and help where we can. Our doors are more open than ever. But with all due respect: we are cleaning our house … and that is none of your business. “
The crypto community responds
Social media comments on the subject include points like El Salvador should be free to decide its own monetary policy, and asks revolution since the IMF is doing this to protect its power of influence.
Regarding El Salvador’s $ 1 billion budget deficit, Max keizer addressed the idea of the Bitcoin community raising the money and lending it to the Central American country.
“I’m sure #Bitcoiners You can organize a $ 1 billion provisional credit line for El Salvador. The IMF can go to hell. “
Keizer He then tweeted about his “Bitcoin Mining-backed Volcanic Bond” (BMBVB) idea. Precise details on this are scarce at this time. But presumably, as the name suggests, it would be backed by revenue generated by volcano-powered mining networks.
President Bukele He said that yesterday he spoke with the country’s geothermal electricity company to act on volcano-powered Bitcoin mining.
Source: BTCUSD on TradingView.com